RBI cancels the licence of Sahakari Bank; Check Name of Bank

The Reserve Bank of India (RBI) has cancelled the licence of “Babaji Date Mahila Sahakari Bank Limited, Yavatmal, Maharashtra”, vide order dated November 09, 2022.

Consequently, the bank ceases to carry on banking business, with effect from the close of business on November 11, 2022.

Additionally, an order for the bank’s wound up and the appointment of a liquidator have been asked from the Commissioner for Cooperation and Registrar of Cooperative Societies in Maharashtra.

The Reserve Bank cancelled the licence of the bank as:

1. 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.

2. 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;

3. The continuance of the bank is prejudicial to the interests of its depositors;

4. The bank with its present financial position would be unable to pay its present depositors in full; and

5. 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, “Babaji Date Mahila Sahakari Bank Limited, Yavatmal, Maharashtra” 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.

Each depositor is entitled to receive a deposit insurance claim amount from the Deposit Insurance and Credit Guarantee Corporation (DICGC) upon liquidation, up to a maximum of Rs. 5,00,000 (Rupees five lakh only), subject to the requirements of the DICGC Act, 1961. Approximately 79% of depositors are eligible to collect the full value of their deposits from DICGC, according to data provided by the bank. As of October 16, 2022, the DICGC had already paid out 294.64 crore rupees of the total insured deposits in accordance with Section 18A of the DICGC Act, 1961, based on the consent given by the relevant bank depositors.