The Reserve Bank has cancelled the licence of city-based Veershaiva Co-operative Bank, as the lender has become insolvent.

"In view of the fact that Veershaiva Co-operative Bank Ltd, Mumbai (Maharashtra), had ceased to be solvent... the Reserve Bank of India delivered the order cancelling its licence to the bank as on the close of business on December 30, 2011," the apex bank said in a statement.

It said efforts to revive the bank in consultation with the Maharashtra government have failed and the depositors were being inconvenienced by continued uncertainty.

Veershaiva Co-operative Bank's capital adequacy ratio stood at (-) 139.6 per cent at the end of March 2011, while its gross NPAs constituted 79.1 per cent of gross advances.

The Registrar of Cooperative Societies, Maharashtra, has been requested to issue an order for winding up the bank and appoint a liquidator for the bank.

"On liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of Rs 1 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC) under the usual terms and conditions," the statement said. (PTI)