HomeLatest NewsMaharashtra's Lakshmi Cooperative Bank license revoked, depositors can claim up to Rs...

Maharashtra’s Lakshmi Cooperative Bank license revoked, depositors can claim up to Rs 5 lakh Personal finance news

Maharashtra: The Reserve Bank of India (RBI) has canceled the license of “The Lakshmi Co-operative Bank Limited, Solapur, Maharashtra” with effect from September 22, 2022. The RBI said the bank does not have adequate capital and earning potential and it would be detrimental to public interest if the bank is allowed to continue its operations. Depositors can claim their credit up to 5 lakhs on liquidation of the Cooperative Bank.

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“Consequent to the cancellation of its licence, “Laxmi Co-operative Bank Limited, Solapur, Maharashtra” is prohibited from carrying on the business of ‘banking’ which includes, inter alia, acceptance of deposits and payment of deposits as defined in Sec. 5( b) With immediate effect vide Section 56 of the Banking Regulation Act, 1949. RBI circular said.

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RBI in its notification requested the Cooperative Commissioner and Registrar of Cooperative Societies, Maharashtra to issue an order to wind up the bank and appoint a liquidator for the bank.

Further, the RBI circular noted that the bank does not have adequate capital and earning potential. Also, it does not comply with certain provisions of the Banking Regulation Act, 1949. With the current financial condition the bank will be unable to pay its current depositors in full and if the bank is allowed to carry over, the public interest will be adversely affected. On its banking business, it added.

The circular states that every depositor will be entitled to deposit insurance claim amount up to a financial ceiling of Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC).

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