RBI cancels licence of Shri Anand Co-operative Bank due to lack of capital

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on Thursday said it has cancelled the license of Shri Anand Co-operative Bank, Chinchwad, as the lender does not have adequate capital and cannot pay its present depositors in full.

The bank ceases to carry on banking business, with effect from the close of business on Thursday (July 7, 2022), the (RBI) said in a statement.

The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra has been asked to issue an order for winding up the bank and appoint a liquidator for the bank.

As per the data submitted by the bank, more than 99 per cent of the depositors are entitled to receive full amount of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC), added.

“Consequent to the cancellation of its license, ‘Shri Anand Co-operative Bank Ltd, Chinchwad, Pune’ is prohibited from conducting the business of banking which includes, among other things, acceptance of deposits and repayment of deposits…with immediate effect,” the central bank said.

Giving reasons for cancelling the license, the said the bank does not have adequate capital and earning prospects, and hence does not comply with the provisions of the Banking Regulation Act, 1949.

Also, the bank with its present financial position would be unable to pay its present depositors in full.

“Public interest would be adversely affected if the bank is allowed to carry on its banking business any further,” the RBI said.

On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to Rs 5 lakh from DICGC.

As on May 18, 2022, DICGC has already paid Rs 9.42 crore of the total insured deposits, the RBI said.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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