RBI cancels licence of Karad Janata Sahakari Bank
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The Reserve Bank of India (RBI) has cancelled the licence of Karad Janata Sahakari Bank, Karad, in Maharashtra, with effect from the close of business from December 7.
With the cancellation of licence and commencement of liquidation proceedings, the process of paying the depositors of the bank as per the DICGC Act, 1961, will be set in motion. On liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of Rs.5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC) as per usual terms and conditions. More than 99 per cent of the depositors of the bank will get full payment of their deposits from DICGC.
The bank, located in South Maharashtra, has 29 branches and about 32,000 members.
The press release issued by the RBI stated: “The bank was under All Inclusive Directions since November 7, 2017. 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.”
The Reserve Bank statement added that it cancelled the licence of the bank as 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 section 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 statement added.
The RBI stated that the continuance of the bank is prejudicial to the interests of depositors. The bank, with its present financial position, would be unable to pay its present depositors in full; and the public interest would be adversely affected if the bank is allowed to carry on its banking business any further.
With the cancellation of licence and commencement of liquidation proceedings, the process of paying the depositors of the bank as per the DICGC Act, 1961, will be set in motion. On liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of Rs.5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC) as per usual terms and conditions. More than 99 per cent of the depositors of the bank will get full payment of their deposits from DICGC.
The bank, located in South Maharashtra, has 29 branches and about 32,000 members.
The press release issued by the RBI stated: “The bank was under All Inclusive Directions since November 7, 2017. 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.”
The Reserve Bank statement added that it cancelled the licence of the bank as 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 section 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 statement added.
The RBI stated that the continuance of the bank is prejudicial to the interests of depositors. The bank, with its present financial position, would be unable to pay its present depositors in full; and the public interest would be adversely affected if the bank is allowed to carry on its banking business any further.
Category : Income Tax | Comments : 0 | Hits : 358
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