RBI has prohibited Shankarrao Pujari Nutan Nagari Sahakari Bank Limited from conducting any banking business further effective from 04 December, 2023.
New Delhi: The Reserve Bank of India (RBI) on Monday (December 04, 2023) cancelled the licence of Shankarrao Pujari Nutan Nagari Sahakari Bank Limited, Ichalkaranji, Kolhapur.
“Consequently, the bank ceases to carry on banking business, with effect from the close of business on December 04, 2023. The Commissioner for Cooperation and Registrar Cooperative Societies, Maharashtra has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank,” RBI said in a release.
The Reserve Bank cancelled the licence of the bank as the latter 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, RBI said.
– THe central bank further added that 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;
– The continuance of the bank is prejudicial to the interests of its depositors;
– The bank with its present financial position would be unable to pay its present depositors in full; and
– Public interest would be adversely affected if the bank is allowed to carry on its banking business any further.
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RBI has prohibited Shankarrao Pujari Nutan Nagari Sahakari Bank Limited from conducting any banking business further.
“Consequent to the cancellation of its licence, “Shankarrao Pujari Nutan Nagari Sahakari Bank Limited, Ichalkaranji, Kolhapur” 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,” RBI said.
What Happens To Customer’s Money After RBI Cancels License Of Shankarrao Pujari Nutan Nagari Sahakari Bank Ltd?
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) subject to the provisions of DICGC Act, 1961.
As per the data submitted by the bank, 99.85% of the depositors are entitled to receive full amount of their deposits from DICGC. As on July 24, 2023 DICGC has already paid Rs 41.60 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.
