[ad_1]
Mumbai:
The Reserve Bank of India on Tuesday mentioned it has cancelled the licence of Karad Janata Sahakari Bank Ltd in Maharashtra because it doesn’t have sufficient capital and incomes prospects.
More than 99 per cent of the depositors of the financial institution will get full fee of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC), the RBI mentioned in an announcement.
With the cancellation of licence and starting of liquidation proceedings, the method of paying the depositors of Karad Janata Sahakari Bank will probably be set in movement.
On liquidation, each depositor is entitled to compensation of their deposits as much as Rs 5 lakh solely from the DICGC.
After cancellation of licence from shut of enterprise hour on December 7, the financial institution can not work anymore, which incorporates taking deposits and repaying deposits.
The RBI mentioned the financial institution was below “all inclusive directions” since November 7, 2017. The Commissioner for Cooperation and Registrar of Cooperative Societies in Maharashtra has been requested to challenge an order for winding up the financial institution and appointing a liquidator.
The RBI mentioned it cancelled the licence of the financial institution because it “does not have adequate capital and earning prospects”. As such, it doesn’t adjust to the provisions of the Banking Regulation Act, 1949.
“The continuance of the bank is prejudicial to the interests of its depositors,” the RBI mentioned, including the financial institution in its current monetary place could be unable to pay its depositors in full.
The RBI mentioned, “Public interest would be adversely affected if the bank is allowed to carry on its banking business any further.”
[ad_2]
Source hyperlink