HomeLatest NewsRBI has canceled the license of Solapur-based Lakshmi Co-op Bank

RBI has canceled the license of Solapur-based Lakshmi Co-op Bank

The Reserve Bank of India on Thursday said it has canceled the license of Solapur (Maharashtra)-based The Lakshmi Co-operative Bank Ltd as the lender lacks sufficient capital and earning potential.

According to the data submitted by cooperative banks, more than 99 per cent depositors are entitled to the full amount of their deposits from the Deposit Insurance and Credit Guarantee Corporation (DICGC), RBI said in a statement.

As of September 13, 2022, DICGC has already paid 193.68 crore out of total insured deposits, it added.

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“The bank does not have adequate capital and earning potential,” RBI said while announcing that Lakshmi Cooperative Bank has ceased banking business, since the closure of business on Thursday (September 22, 2022).

According to the statement, the cooperative bank has failed to comply with the requirements of the Banking Regulation Act, 1949 and its continued existence is detrimental to the interest of its depositors.

“With the current financial condition the bank will be unable to fully pay its existing depositors,” the RBI said

As a result of cancellation of licence, the bank is prohibited from carrying on the business of ‘banking’, which includes acceptance of deposits and payment of deposits.

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The Commissioner of Cooperatives and Registrar of Cooperative Societies, Maharashtra has also been requested to issue an order to wind up the bank and appoint a liquidator for the bank, the central bank added.

After liquidation, every depositor shall be entitled to the deposit insurance claim amount of his/her depositor. 5 lakhs from DICGC.

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