RBI cancels licence of Mumbai-based The CKP Co-operative Bank

The Reserve Bank of India on May 2 cancelled the licence of Mumbai-based The CKP Co-operative Bank Ltd. The central bank in an order dated April 28, 2020 maintained that the financial position of the bank is highly adverse and unsustainable.

Adverse financial position was one of the multiple other reasons behind the cancellation. The bank, as per RBI's observation, also did not have any concrete revival plan or proposal for merger with another bank.

Clarifying about deposits of account holders the order said that depositors of the bank have been entitled to repayment up to a monetary ceiling of Rs 5 lakh only.

As per a statement released by the RBI, consequent to the cancellation of its licence, The CKP Co-operative Bank Ltd., Mumbai, is prohibited from conducting the business of ‘banking’ which includes 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.

With the cancellation of licence and commencement of liquidation proceedings, the process of paying the depositors of The CKP Co-operative Bank Ltd., Mumbai, as per the DICGC Act, 1961 will be set in motion.

On liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of ₹ 5,00,000/- (Rupees five lakh only) from the Deposit Insurance and Credit Guarantee Corporation (DICGC) as per
usual terms and conditions.

You can read the complete order below: