BANK DEPOSITORS ALERT - RBI cancels LICENCE of This bank in Maharashtra - Know details here!

The Reserve Bank has cancelled the licence of Karnala Nagari Sahakari Bank, Panvel in Maharashtra for not having adequate capital and being unable to pay its present depositors in full. The bank ceased to carry on banking business with effect from the close of business on Friday.

"As per the data submitted by the bank, 95 per cent of the depositors will receive full amounts of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC)," the central bank said while announcing cancellation of the bank's licence.

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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 lakh from DICGC.

RBI said the licence of Karnala Nagari Sahakari Bank was cancelled through an order dated August 9, 2021.

The licence of the bank is cancelled as it does not have adequate capital and earning prospects, RBI said, adding that the lender has failed to comply with the requirements of various sections of the Banking Regulation Act, 1949.

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

While announcing cancellation of the licence, RBI said public interest would be adversely affected if the bank is allowed to carry on its banking business any further.

Now, Karnala Nagari Sahakari Bank cannot conduct the business of banking, which includes acceptance of deposits and repayment of deposits.

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.

Meanwhile, in separate statements, RBI said it has imposed penalty on three cooperative banks for deficiencies in regulatory compliance.

A penalty of Rs 25 lakh each has been imposed on Madhya Pradesh Rajya Sahakari Bank Maryadit, Bhopal, and The Greater Bombay Cooperative Bank Ltd, Mumbai.

RBI has also imposed a penalty of Rs 50,000 on Jalna People's Cooperative Bank Ltd, Jalna, Maharashtra.

In all the three cases, RBI said the penalties are based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the cooperative banks with their respective customers.