MUMBAI: The RBI has cancelled the licence of Rajasthan-based Bhilwara Mahila Urban Co-operative Bank as it does not have adequate capital and earning prospects.
The RBI said it has cancelled the licence of the bank with effect from the close of business on August 31, 2018.
"The bank does not have adequate capital and earning prospects.
The bank is not in a position to pay its present and future depositors in full as and when their claims accrue," the apex bank said.
The affairs of the bank are being conducted in a manner detrimental to the interest of its present and future depositors and no useful purpose would be served by allowing the bank to continue as envisaged in the Banking Regulation Act, it said further.
"Consequent to the cancellation of its licence, Bhilwara Mahila Urban Co-operative Bank Ltd, Bhilwara, Rajasthan is prohibited from conducting the business of banking which includes acceptance of deposits and repayment of deposits with immediate effect," the RBI said.
With the cancellation of licence and commencement of liquidation proceedings, the process of paying the depositors of the bank will be set in motion, it said.
On liquidation, every depositor is entitled to repayment of deposits up to a monetary ceiling of Rs 1 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC).