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India

Maharashtra Co-Op Bank Licence Cancelled, People Can Claim Up To 5 Lakhs

RBI said that the Laxmi Co-operative Bank Limited, Solapur, Maharashtra is prohibited from conducting the business of 'banking' which includes, among other things, acceptance of deposits and repayment of deposits with immediate effect.

RBI cancelled the licence of Maharashtra’s Laxmi Co-operative Bank. (Photo Credit: File)

New Delhi: The Reserve Bank of India (RBI) on Thursday (September 22, 2022) cancelled the licence of The Laxmi Co-operative Bank Ltd, Solapur, Maharashtra. According to the RBI, depositors can claim up to Rs 5 lakh.

A press release signed by RBI Chief General Manager Yogesh Dayal stated: “Today, the Reserve Bank of India (RBI), vide order dated September 14, 2022, has cancelled the licence of “The Laxmi Co-operative Bank Limited, Solapur, Maharashtra.”

Consequently, the bank ceases to carry on banking business, with effect from the close of business on September 22, 2022. 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 Reserve Bank cancelled the licence of the bank as:

The bank does not have adequate capital and earning prospects. As such, it does not comply with the provisions of Section 11(1) and Section 22 (3) (d) read with Section 56 of the Banking Regulation Act, 1949. The bank has failed to comply with the requirements of Sections 22(3) (a), 22 (3) (b), 22(3)(c), 22(3) (d) and 22(3)(e) read with Section 56 of the Banking Regulation Act, 1949;

The continuance of the bank is 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 The public interest would be adversely affected if the bank is allowed to carry on its banking business any further. Consequent to the cancellation of its licence, “The Laxmi Co-operative Bank Limited, Solapur, Maharashtra” is prohibited from conducting the business of ‘banking’ which includes, among other things, acceptance of deposits and repayment of deposits as defined in Section 5(b) read with Section 56 of the Banking Regulation Act, 1949 with immediate effect.

On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of ₹5,00,000/- (Rupees 5 lakh only) from Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of DICGC Act, 1961.

According to the data submitted by the bank, about 99 per cent of the depositors are entitled to receive the full amount of their deposits from DICGC. As on September 13, 2022, DICGC has already paid ₹193.68 crores of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961 based on the willingness received from the concerned depositors of the bank.

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