October 1, 2022

RBI cancels licence of Solapur-based Laxmi Co-op bank

The Reserve Bank of India on Thursday mentioned it has cancelled the licence of Solapur (Maharashtra) founded The Laxmi Co-operative Bank Limited because the lender does no longer have ok capital and incomes possibilities.

As according to the information submitted by way of the cooperative bank, greater than 99 according to cent of the depositors are entitled to obtain complete quantity of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC), the RBI mentioned in a observation.

As of September 13, 2022, the DICGC has already paid 193.68 crore of the overall insured deposits, it added.

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“The bank does not have adequate capital and earning prospects,” the RBI mentioned whilst pronouncing that The Laxmi Co-operative Bank ceases to hold on banking trade, with impact from the shut of trade on Thursday (September 22, 2022).

As according to the observation, the co-operative bank has did not conform to the necessities the Banking Regulation Act, 1949 and its continuance is prejudicial to the pursuits of its depositors.

“The bank with its present financial position would be unable to pay its present depositors in full,” the RBI mentioned.

Consequent to the cancellation of its licence, the bank is illegal from carrying out the trade of ‘banking’ which incorporates, amongst different issues, acceptance of deposits and reimbursement of deposits.

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The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra has additionally been asked to factor an order for polishing off the bank and appoint a liquidator for the bank, the central bank added.

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