The Reserve Bank has cancelled the licence of Karnala Nagari Sahakari Bank, Panvel in Maharashtra for not having enough capital and being unable to pay its current depositors in full.
The financial institution ceased to hold on banking enterprise with impact from the shut of enterprise on Friday.
“As per the data submitted by the bank, 95 per cent of the depositors will receive full amounts of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC),” the central financial institution stated whereas asserting cancellation of the financial institution’s licence.
On liquidation, each depositor can be entitled to obtain deposit insurance coverage declare quantity of his/her deposits as much as a financial ceiling of Rs 5 lakh from DICGC.
RBI stated the licence of Karnala Nagari Sahakari Bank was cancelled by an order dated August 9, 2021.
The licence of the financial institution is cancelled because it doesn’t have enough capital and incomes prospects, RBI stated, including that the lender has didn’t adjust to the necessities of varied sections of the Banking Regulation Act, 1949.
Also, “the bank with its present financial position would be unable to pay its present depositors in full”, it stated.
While asserting cancellation of the licence, RBI stated public curiosity can be adversely affected if the financial institution is allowed to hold on its banking enterprise any additional.
Now, Karnala Nagari Sahakari Bank can’t conduct the enterprise of banking, which incorporates acceptance of deposits and compensation of deposits.
The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra has additionally been requested to problem an order for winding up the financial institution and appoint a liquidator for the financial institution.
Meanwhile, in separate statements, RBI stated it has imposed penalty on three cooperative banks for deficiencies in regulatory compliance.
A penalty of Rs 25 lakh every has been imposed on Madhya Pradesh Rajya Sahakari Bank Maryadit, Bhopal, and The Greater Bombay Cooperative Bank Ltd, Mumbai.
RBI has additionally imposed a penalty of Rs 50,000 on Jalna People’s Cooperative Bank Ltd, Jalna, Maharashtra.
In all of the three circumstances, RBI stated the penalties are based mostly on deficiencies in regulatory compliance and isn’t meant to pronounce upon the validity of any transaction or settlement entered into by the cooperative banks with their respective prospects.
