According to RBI, the license of Seva Vikas Sahakari Bank has been cancelled:
- The bank does not have sufficient capital and earning potential. Thus, it does not comply with the provisions of Section 11(1) and Section 22(3)(d) read with Section 56 of the Banking Regulation Act, 1949.
- The bank has failed to comply with the requirements of sections 22(3)(a), 22(3)(b), 22(3)(c), 22(3)(d) and 22(3)(e) . read with section 56 of the Banking Regulation Act, 1949;
- The continuance of the bank is prejudicial to the interests of its depositors;
- the bank will be unable to make full payments to its existing depositors with its current financial position; And
- Public interest will be adversely affected if the bank is allowed to carry forward its banking business.
The Sewa Vikas Sahakari Bank Ltd., Pune, Maharashtra is not immediately permitted to carry on the business of “banking” which includes, inter alia, accepting deposits and making payments of deposits, as in section 56 read with 5(b) has been defined. Consequent upon the cancellation of the license of the Banking Regulation Act, 1949. what happens after liquidation
As per RBI press release, “On liquidation, every depositor shall be entitled to receive the deposit insurance claim amount of his deposit up to ₹ 5,00,000/- (Rupees five lakh only). Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of the DICGC Act, 1961. As per the data furnished by the bank, almost 99% of the depositors are entitled to receive the full amount of their deposits from DICGC. As on 14th September, 2022, DICGC has already paid T 152.36 crore out of the total insured deposits under the provisions of section 18A of the DICGC Act, 1961 based on the wishes received from the concerned depositors of the bank.
How are claims settled by DICGC?
In case a bank goes into liquidation, the DICGC will allow each depositor through the liquidator a maximum of Rs. 5 lakhs, after executing the correct set-off of any loan and adding the deposits in equal capacity and equal authority. After careful examination of the primary claim list supplied by the liquidator, the Corporation determines the admissible claim amount. If the liquidation bank has liquid cash, they are encouraged to compensate eligible depositors out of those funds in accordance with the DICGC Act, 1961, instead of allowing the DICGC to release any funds. However, in case liquid funds are not available only partially or are not available, DICGC will release part or all payments, if necessary.