RBI cancels licence of THIS bank, all operations prohibited. Check details
The Reserve Bank of India (RBI) has cancelled the licence of the Karad Janata Sahakari Bank Ltd, Karad, Maharashtra. The reason cited the absence of adequate capital and earning prospects as the reason behind the cancellation. However, over 99 per cent of the depositors of the bank will get full payment of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC), the central bank said in a statement.
The process of paying the depositors of the Karad Janata Sahakari Bank will be set in motion with the cancellation of licence and commencement of liquidation proceedings. On liquidation, every depositor if entitled to repayment of his/her deposits up to a monetary ceiling of Rs 5 lakh only from the Deposit Insurance and Credit Guarantee Corporation (DICGC) as per usual terms and conditions.
The bank has been prohibited from conducting the business of 'banking' which includes acceptance of deposits and repayment of deposits with immediate effect.
According to the RBI, the Karad Janata Sahakari Bank was under "all inclusive directions" since November 07, 2017. The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra, has been requested to issue an order for winding up the bank and appoint a liquidator for the bank.
The central bank said it cancelled the licence of Karad Janata Sahakari Bank as it "does not have adequate capital and earning prospects". As such, it does not comply with the relevant provisions of the Banking Regulation Act, 1949.
The RBI said that the continuance of the bank is "prejudicial to the interests of its depositors." It said the bank with its present financial position would be unable to pay its present depositors in full. Public interest would be adversely affected if the bank is allowed to carry on its banking business any further.
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