RBI said it canceled the banking license of Karad Janata Sahakari Bank Ltd
Bombay:
The Reserve Bank of India said on Tuesday that it has canceled the license of Karad Janata Sahakari Bank Ltd in Maharashtra as it has no adequate capital and no profit prospects.
More than 99 percent of the bank’s depositors will obtain full payment of their deposits from the Deposit Insurance and Credit Guarantee Corporation (DICGC), the RBI said in a statement.
With the cancellation of the license and the beginning of the liquidation procedures, the payment process to the depositors of Karad Janata Sahakari Bank will be launched.
At the time of settlement, each depositor is entitled to a refund of their deposits up to Rs 5 lakh from the DICGC alone.
After the cancellation of the license from the close of business hours on December 7, the bank can no longer operate, which includes taking deposits and refunding deposits.
The RBI said the bank was under “all-inclusive instructions” since November 7, 2017. The Cooperative Societies Registration and Cooperation Commissioner in Maharashtra was asked to issue an order to liquidate the bank and appoint a liquidator.
The RBI said it canceled the bank’s license because it “does not have adequate capital and no prospect of profit. As such, it does not comply with the provisions of the Banking Regulation Act of 1949.
“The continuation of the bank is detrimental to the interests of its depositors,” the RBI said, adding that the bank in its current financial situation would not be able to pay its depositors in full.
The RBI said that “the public interest would be negatively affected if the bank is allowed to continue its banking business.”
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