The order will become effective after six weeks from today. The Bank will cease to work with effect from September 22, 2022
The Reserve Bank of India, on Wednesday, cancelled the license of Rupee Co-operative Bank Ltd, in compliance with the Bombay High Court order dated September 12, 2017, as per a statement by RBI. The order will become effective after six weeks from today. The Bank will cease to carry out all activities with effect from September 22, 2022.
The central bank has cancelled Rupee Cooperative Bank’s license in relation to the non-compliance with Sections 22(3) (a), 22 (3) (b), 22(3)(c), 22(3) (d) and 22(3)(e) and Section 56 of the Banking Regulation Act.
RBI said that the bank does not have adequate capital and earning prospects and the continuance of the bank will be prejudicial to the interests of depositors.
“The bank with its present financial position would be unable to pay its present depositors in full, and the public interest would be adversely affected if the bank is allowed to carry on its banking business any further,” the statement said.
Notably, apart from the cancellation of the license, the beleaguered bank is also prohibited from carrying out banking activity such as acceptance and repayment of deposits with effect from September 22.
Notably, the depositors are entitled to receive deposit insurance claim amount up to a maximum ceiling of Rs 5 lakh from Deposit Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of DICGC Act, 1961.
“As per the data submitted by the bank, more than 99% of the depositors are entitled to receive the full amount of their deposits from DICGC. As on May 18, 2022, DICGC has already paid ₹700.44 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,” RBI said.