RBI cancels licence of Shankarrao Pujari Nutan Nagari Sahakari Bank for funds crunch

RBI

The Reserve Bank of India (RBI) has cancelled the licence of Kolhapur-based Shankarrao Pujari Nutan Nagari Sahakari Bank Limited because of "inadequate capital".

The lender ceases to carry out banking business from the close of business hour on December 4, the RBI said in a release. The Commissioner for Cooperation and Registrar Cooperative Societies, Maharashtra, has also been requested to issue an order for winding up the bank and appoint a liquidator for it, the RBI said.

The bank does not have adequate capital and earning prospects and the continuance of the bank is prejudicial to the interests of its depositors, the RBI said, adding the bank with its present financial position would be unable to pay its present depositors in full.

Hence, public interest would be adversely affected if the bank is allowed to carry on its banking business any further, the RBI said, adding that the bank is prohibited from accepting deposits with immediate effect, the RBI said.

On liquidation, every depositor would be entitled to receive deposit insurance claim amount of deposits up to Rs 5 lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC), subject to the provisions of the DICGC Act, 1961, the RBI said.

As on July 24, DICGC paid Rs 41.60 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.