MUMBAI: The licence of Independence Co-operative Bank, Nashik has been cancelled as it does not have adequate capital and earning prospects, the RBI said on Thursday.
Independence Co-operative Bank has ceased to carry on banking business with effect from the close of business hours on February 3, 2022 (Thursday), the RBI said in a statement.
On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a ceiling of Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
As per the data submitted by the bank, more than 99 per cent of the depositors are entitled to receive full amount of their deposits from DICGC. The RBI said the bank has failed to comply with the requirements of the Banking Regulation Act, 1949.
Continuance of the bank, RBI said, is prejudicial to the interests of its depositors, and with its present financial position, it would be unable to pay its depositors in full.
"Public interest would be adversely affected if the bank is allowed to carry on its banking business any further," the central bank said.
Consequent to the cancellation of its licence, Independence Co-operative Bank has been prohibited from conducting the business of banking, including acceptance and repayment of deposits.
As of January 27, 2022, DICGC had disbursed Rs 2.36 crore of the total insured deposits based on the willingness received from the concerned depositors of the bank, the RBI said.