The Reserve Bank of India (RBI) on June 19 cancelled the licence of Mumbai-based The City Co-operative Bank Ltd. Consequently following which, the bank will cease to carry on banking business effect from the close of business on June 19, 2024.
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 Reserve Bank cancelled the licence of the bank as the bank did not have adequate capital and earning prospects, the central bank said in a release.
The continuance of the bank is prejudicial to the interests of its depositors, the central bank said.
The City Co-operative Bank with its present financial position would be unable to pay its present depositors in full and the public interest would be adversely affected if the bank is allowed to carry on its banking business any further, the RBI said.
Consequent to the cancellation of its licence, the bank is prohibited from conducting the business including acceptance of deposits and repayment of deposits with immediate effect, the RBI said.
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 DICGC Act, 1961, the RBI said.
As per the data submitted by the bank, about 87 percent of the depositors are entitled to receive full amount of their deposits from DICGC.
As on June 14, 2024, DICGC has already paid Rs 230.99 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.
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