Reserve Bank of India On Thursday it said it has canceled the license of Solapur (Maharashtra)-based The Lakshmi Co-operative Bank Ltd as the lender does not have sufficient capital and earning prospects. RBI said in a statement that as per the data furnished by the co-operative bank, more than 99 per cent of the depositors are entitled to receive the full amount of their deposits from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
As on September 13, 2022, DICGC has already paid Rs 193.68 crore of the total Sum Assured. “The bank does not have sufficient capital and earning prospects,” RBI said in an announcement that Lakshmi Sahakari Bank ceases to do banking business at the close of business on Thursday (September 22, 2022).
According to the statement, the co-operative bank has failed to comply with the requirements of the Banking Regulation Act, 1949 and its continuance is prejudicial to the interests of its depositors. “The bank with its present financial position will be unable to make full payment to its existing depositors,” RBI said.
Consequent to the cancellation of its licence, the Bank is prohibited from carrying on the business of banking, which includes, among other things, the acceptance of deposits and repayment of deposits. The central bank said that the Commissioner of Co-operatives and Registrar of Co-operative Societies, Maharashtra have also been requested to issue an order to close the bank and appoint a liquidator for the bank.
Upon liquidation, each depositor shall be entitled to receive deposit insurance claim amount up to Rs.5 lakh of his/her deposit from DICGC.
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