The Reserve Bank of India (RBI) on Monday cancelled the licence of Pune-based Shivajirao Bhosale Sahakari Bank as the lender did not have adequate capital and earning prospects. The apex bank said the bank ceases to carry on banking business, with effect from the close of business on May 31.
” The bank does not have adequate capital and earning prospects. As such, it does not comply with the provisions…of the Banking Regulation Act, 1949…The continuance of the bank is prejudicial to the interests of its depositors,” read a statement issued by the bank.
” The bank has failed to comply with the requirements of section 22(3) (a), 22 (3) (b), 22(3)(c), 22(3) (d) and 22(3)(e) read with section 56 of the Banking Regulation Act, 1949, The continuance of the bank is prejudicial to the interests of its depositors. Public interest would be adversely affected if the bank is allowed to carry on its banking business any further,” it added.
The RBI also put in a request to the Registrar of Cooperative Societies, Maharashtra to issue an order for winding up the bank and appoint a liquidator for the bank. The top bank also assured that the majority of account holders will be able to receive full amounts of their deposits from DICGC.
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“As per the data submitted by the bank, more than 98 per cent of the depositors will receive full amounts of their deposits from DICGC. On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of ₹5 lakh from the DICGC subject to the provisions of the DICGC Act, 1961,” RBI said.
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