RBI cancels licence of Maharashtra-based Independence Co-operative Bank

The Reserve Bank of India (RBI) on February 2, 2022, cancelled the licence of Independence Co-operative Bank Ltd., Maharashtra citing inadequate capital.

Consequently, the bank ceases to carry on banking business, with effect from the close of business on February 03, 2022, the RBI said in a release.

The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank, the RBI said.

The RBI said the bank does not have adequate capital and earning prospects.

The RBI said continuance of the bank is prejudicial to the interests of its depositors and the bank with its present financial position would be unable to pay its present depositors in full.

“Public interest would be adversely affected if the bank is allowed to carry on its banking business any further,” said the RBI.

Consequent to the cancellation of its licence, Independence Co-operative Bank is prohibited from conducting the business of ‘banking’ which includes acceptance of deposits and repayment of deposits, the RBI said.

Further, on liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rupees Five lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of the DICGC Act, 1961, the RBI said.

As per the data submitted by the bank, more than 99% of the depositors are entitled to receive the full amount of their deposits from DICGC, the central bank said.

“As of January 27, 2022, DICGC has disbursed Rs 2.36 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,” the RBI said.