The Reserve Bank of India (RBI) has cancelled banking licence of The Botad Peoples Co-operative Bank with immediate effect and notified it as a non-banking institution.
This makes it obligatory for The Botad Peoples Co-operative Bank to stop conducting the business of ‘banking’, including acceptance of deposits from non-members, RBI said.
“Further, The Botad Peoples Co-operative Bank Ltd., Botad shall ensure to repay unpaid and unclaimed deposits of non-members held by it, whenever demanded, even after being notified as non-banking Institution,” RBI said.
Separately, the RBI also cancelled the licence of Adarsh Mahila Nagari Sahakari Bank Maryadit and the bank ceases to carry on banking business with effect from December 29. The RBI has asked Commissioner and Registrar of Cooperative Societies of Maharashtra to issue an order for winding up the bank and appointing a liquidator.
The RBI cancelled licence of Adarsh Mahila Nagari Sahakari Bank Maryadit because: it does not have adequate capital and earning prospects, it failed in complying with multiple sections of the banking regulation act, and “the continuance of the bank is prejudicial to the interest of its depositors”.
RBI also said 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.
“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, 99.77% of the depositors are entitled to receive full amount of their deposits from DICGC,” RBI said.
It added that as on October 31, the DICGC has already paid Rs 185.38 crore of the total insured deposits, based on the willingness received from the depositors of the bank.
