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Yet another cooperative bank bites the dust, RBI cancels permit of Laxmi Co-operative Bank

As per the data submitted by the bank, about 99 percent of the depositors are entitled to receive the full amount of their deposits from DICGC.

September 22, 2022 / 05:54 PM IST

The Reserve Bank of India (RBI) has cancelled the licence of Maharashtra-based The Laxmi Co-operative Bank Limited citing weak financials.

Consequently, the bank ceases to carry on banking business, with effect from the close of business on September 22, 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 Reserve Bank cancelled the licence of the bank as the lender 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.

The bank with its present financial position would be unable to pay its present depositors in the full and public interest would be adversely affected if the bank is allowed to carry on its banking business any further, the RBI said.

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Consequent to the cancellation of its licence, the bank is prohibited from conducting the business of banking 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 99 percent of the depositors are entitled to receive the full amount of their deposits from DICGC.

As of September 13, 2022, DICGC has already paid Rs193.68 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.
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Tags: #RBI
first published: Sep 22, 2022 05:53 pm
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