Advertisement

Updated December 31st, 2023 at 21:50 IST

RBI cancels licences of four cooperative banks in last two days

These stringent measures by the RBI underline the regulator's commitment to maintaining the stability and integrity of the banking sector.

Reported by: Business Desk
RBI
Reserve Bank of India | Image:Shutterstock
Advertisement

The Reserve Bank of India (RBI) has revoked the licences of four cooperative banks in the last two days, signalling a strict stance on regulatory compliance and financial stability within the banking sector.

The Faiz Mercantile Cooperative Bank Ltd., Nashik, Maharashtra

The RBI, through an order dated December 29, 2023, has cancelled the licence of "The Faiz Mercantile Cooperative Bank Ltd., Nashik, Maharashtra," effective from the close of business on December 30, 2023. The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra, has been requested to initiate the winding-up process and appoint a liquidator for the bank.

Reasons for licence cancellation

Advertisement
  • Inadequate capital and earning prospects, violating provisions of the Banking Regulation Act, 1949.
  • Non-compliance with various sections of the Banking Regulation Act, 1949.
  • The bank's continuation deemed prejudicial to the interests of its depositors.
  • Inability to pay present depositors in full with the current financial position.
  • Adverse impact on public interest if the bank continues its operations.

Consequent to the licence cancellation, "The Faiz Mercantile Cooperative Bank Ltd., Nashik, Maharashtra," is barred from conducting banking activities, including the acceptance and repayment of deposits.

Upon liquidation, depositors are entitled to receive deposit insurance claim amounts, with 99.87 per cent of depositors expected to receive the full amount, according to data submitted by the bank. As of October 30, 2023, DICGC has paid Rs 7.07 crore of the total insured deposits.

Advertisement

Musiri Urban Co-operative Bank Ltd, Musiri

Similarly, the licence of "Musiri Urban Co-operative Bank Ltd., Musiri" has been cancelled, ceasing banking operations from December 29, 2023. The Registrar of Cooperative Societies, Tamil Nadu, is tasked with initiating the winding-up process and appointing a liquidator.

Advertisement

Reasons for licence cancellation
 

  • Inadequate capital and earning prospects, violating provisions of the Banking Regulation Act, 1949.
  • Non-compliance with various sections of the Banking Regulation Act, 1949.
  • The bank's continuation deemed prejudicial to the interests of its depositors.
  • Inability to pay present depositors in full with the current financial position.
  • Adverse impact on public interest if the bank continues its operations.

Musiri Urban Co-operative Bank Ltd, Musiri is prohibited from conducting any banking activities with immediate effect.

Depositors are entitled to receive deposit insurance claim amounts, with 98.67 per cent of depositors expected to receive the full amount. As of September 30, 2023, DICGC has paid Rs 134.42 lakh of the total insured deposits.

Adarsh Mahila Nagari Sahakari Bank Maryadit, Aurangabad, Maharashtra

The licence of "Adarsh Mahila Nagari Sahakari Bank Maryadit, Aurangabad, Maharashtra" has been cancelled, and the bank ceases its banking business from December 29, 2023. The Commissioner and Registrar of Cooperative Societies, Maharashtra, is requested to issue an order for winding up and appoint a liquidator.

Reasons for licence cancellation

Advertisement
  • Inadequate capital and earning prospects, violating provisions of the Banking Regulation Act, 1949.
  • Non-compliance with various sections of the Banking Regulation Act, 1949.
  • The bank's continuation deemed prejudicial to the interests of its depositors.
  • Inability to pay present depositors in full with the current financial position.
  • Adverse impact on public interest if the bank continues its operations.

Adarsh Mahila Nagari Sahakari Bank Maryadit, Aurangabad, Maharashtra is barred from conducting banking activities immediately.

Upon liquidation, depositors are entitled to receive deposit insurance claim amounts, with 99.77 per cent of depositors expected to receive the full amount. As of October 31, 2023, DICGC has paid Rs 185.38 crore of the total insured deposits.

Advertisement

The Botad Peoples Co-operative Bank Ltd., Botad, Gujarat

The RBI has cancelled the licence of "The Botad Peoples Co-operative Bank Ltd., Botad," transforming it into a non-banking institution. Effective from the close of business on December 29, 2023, the bank is mandated to cease conducting banking activities, including the acceptance of deposits from non-members.

The Botad Peoples Co-operative Bank Ltd, Botad is obligated to stop banking operations immediately. The bank must ensure the repayment of unpaid and unclaimed deposits of non-members upon demand, even after being notified as a non-banking institution.

Advertisement

Published December 31st, 2023 at 16:36 IST

Your Voice. Now Direct.

Send us your views, we’ll publish them. This section is moderated.

Advertisement
Advertisement
Whatsapp logo