HomeLatest NewsRBI has canceled the license of Solapur-based Laxmi Cooperative Bank

RBI has canceled the license of Solapur-based Laxmi Cooperative 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.

Till September 13, 2022, DICGC has already disbursed Rs 193.68 crore of total insured deposits, it added. “The bank does not have adequate capital and earning potential,” the 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,” RBI said.

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

At the time of liquidation, each depositor will be entitled to receive from DICGC the deposit insurance claim amount up to Rs.5 lakhs of his deposit.

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