RBI cancels License of Sahakari Bank; Know Reason:

RBI cancels License of Sahakari Bank; Know Reason The Reserve Bank of India (RBI) has cancelled the licence of “Shankarrao Pujari Nutan Nagari Sahakari Bank Limited, Ichalkaranji, Kolhapur”. Consequently, the bank ceases to carry on banking business, with effect from the close of business on December 04, 2023. The Commissioner for Cooperation and Registrar Cooperative Societies of Maharashtra has also been petitioned to issue an order for the bank's winding up and the appointment of a liquidator. The Reserve Bank 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 Sections 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 continuance of the bank is prejudicial to the interests of its depositors;
• The bank with its present financial position would be unable to pay its present depositors in full; and
• Public interest would be adversely affected if the bank is allowed to carry on its banking business any further.

Consequent to the cancellation of its licence, “Shankarrao Pujari Nutan Nagari Sahakari Bank Limited, Ichalkaranji, Kolhapur” is prohibited from conducting the business of ‘banking’ which includes, among other things, acceptance of deposits and repayment of deposits as defined in Section 5(b) read with Section 56 of the Banking Regulation Act, 1949 with immediate effect. On liquidation, every depositor is entitled to collect the deposit insurance claim amount of his/her savings up to a monetary ceiling of 5,00,000 (Rupees five lakh only) from the Deposit Insurance and Credit Guarantee Corporation (DICGC), subject to the rules of the DICGC Act, 1961. According to the bank's records, 99.85% of depositors are eligible to retrieve the full amount of their deposits from DICGC. As of July 24, 2023, the DICGC has already paid 41.60 crore of the total insured deposits under Section 18A of the DICGC Act, 1961, depending on the desire of the bank's depositors.