RBI cancels licence of Maharashtra’s Babaji Date Mahila Sahakari Bank in Yavatmal

The Reserve Bank of India (RBI) Friday cancelled the licence of Maharashtra-based Babaji Date Mahila Sahakari Bank Limited in Yavatmal, citing that the lender didn’t have ample capital and incomes prospects.

According to the info submitted by the financial institution, the RBI stated about 79 per cent of the depositors are entitled to obtain full quantity of their deposits from the Deposit Insurance and Credit Guarantee Corporation (DICGC).

As on October 16, 2022, DICGC has paid Rs 294.64 crore of the entire insured deposits.

Amid deterioration within the lender’s monetary place, the RBI, on Monday, imposed a number of restrictions on the financial institution, together with capping withdrawals at Rs 5,000 for purchasers.

Owing to the cancellation of its licence, Babaji Date Mahila Sahakari Bank Limited has been prohibited from offering banking companies akin to acceptance of deposits and reimbursement of deposits with quick impact, amongst others.

While saying the cancellation of the financial institution’s licence with impact from the shut of enterprise on Friday (November 11, 2022), the RBI stated in its order that the financial institution doesn’t have ample capital and incomes prospects.

“The bank with its present financial position would be unable to pay its present depositors in full; and public interest would be adversely affected if the bank is allowed to carry on its banking business any further,” the RBI stated.

“The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank,” the RBI order added.

On liquidation, each depositor can be entitled to obtain a deposit insurance coverage declare quantity of his/her deposits as much as a financial ceiling of Rs 5 lakh from DICGC.

(With inputs from PTI)