Report Wire - RBI cancels licence of Solapur-based Laxmi Co-operative Bank

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RBI cancels licence of Solapur-based Laxmi Co-operative Bank

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The Reserve Bank of India (RBI) Thursday cancelled the licence of Solapur-based Laxmi Co-operative Bank Limited.

According to the RBI’s order, the financial institution would stop to hold on its banking companies from September 22 and the central financial institution has additionally requested the commissioner for cooperation and registrar of cooperative societies, Maharashtra, to difficulty an order for winding up the financial institution and appoint a liquidator for it.

Listing the explanations for cancelling the financial institution’s licence, the RBI acknowledged: “The bank does not have adequate capital and earning prospects and as such, it does not comply with the provisions of Section 11(1) and Section 22 (3) (d) of the Banking Regulation Act, 1949. The continuance of the bank is also prejudicial to the interests of its depositors. 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’s order added, “On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5,00,000 from Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of DICGC Act, 1961.”