According to a press release, 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.
“Consequent to the cancellation of its licence, “Rupee Co-operative Bank Ltd, Pune” stands 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 effect from September 22, 2022,” stated the RBI press release.
The central bank mentioned following reasons for cancellation of the licence:
- 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
- Public interest would be adversely affected if the bank is allowed to carry on its banking business any further.
The RBI has directed the bank to provide every entitled depositor a full amount of their deposits from DICGC. It said, “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 five lakh only) from Deposit Insurance and Credit Guarantee Corporation (DICGC) on liquidation.”
As on May 18, 2022, DICGC has already paid ₹700.44 crore 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.