The Reserve Bank of India (RBI) on September 25 said it has cancelled licence of The Kapol Co-operative Bank over inadequate capital and earning prospects.
"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," RBI said in a release.
The Additional Secretary & Central Registrar of Cooperative Societies, Ministry of Cooperation, Government of India has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank, release said.
Consequently, the bank ceases to carry on banking business, with effect from the close of business on September 25, 2023, release said.
After the cancellation of the licence, the co-op bank has been prohibited from conducting banking businesses, including acceptance of deposits and repayment of deposits, the RBI added.
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 lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC)
subject to the provisions of DICGC Act, 1961, release said.
The release also said that as per the data submitted by the bank, 96.09 percent of the depositors are entitled to receive full amount of their deposits
from DICGC.
"As on July 24, 2023, DICGC has already paid Rs 230.16 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 in a release.
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