RBI cancels the licence of Laxmi Co-operative Bank

As per the data submitted by the bank, about 99% of the depositors are entitled to receive full amount of their deposits from DICGC.

RBI cancels the licence of Laxmi Co-operative Bank

New Delhi: The Reserve Bank of India (RBI), has cancelled the licence of “The Laxmi Co-operative Bank Limited, Solapur, Maharashtra”. According to the release, the bank ceases to carry on banking business, with effect from the close of business on September 22, 2022.

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

The Reserve Bank cancelled the licence of the bank as the bank does not have adequate capital and earning prospects. It 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 Laxmi Co-operative Bank Limited, Solapur, 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.

On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5,00,000/- (Rupees five lakh only) from Deposit Insurance and Credit Guarantee Corporation (DICGC).

As per the data submitted by the bank, about 99% of the depositors are entitled to receive full amount of their deposits from DICGC. As on September 13, 2022, DICGC has already paid Rs 193.68 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961 based on the willingness received from the concerned depositors of the bank.