“The Reserve Bank has canceled the license of the bank as it does not have sufficient capital and earning prospects. Thus, it does not comply with the provisions of section 11(1) and section 22(3)(d) read with section 56 The bank failed to comply with the requirements of section 22(3)(a), 22(3)(b), 22(3)(c), 22(3)(d) of the Banking Regulation Act, 1949 and 22(3)(e) of the Banking Regulation Act, 1949 read with section 56,” the central bank said in a release.
“The continuance of the bank is prejudicial to the interests of its depositors. The bank with its present financial position will be unable to make full payments to its existing depositors. Public interest will be adversely affected if the bank is allowed to carry on its banking business. Further,” the RBI further said.
The lender will not conduct banking business from the close of business on September 22, 2022, it further said.
“Lakshmi Co-Operative Bank Ltd., Solapur“Maharashtra” is prohibited from carrying on the business of ‘banking’ which shall, inter alia, include the acceptance of deposits and repayment of deposits as defined in section 5(b) read with section 56 of the Banking Regulation Act, 1949 with immediate effect. The statement further said.
RBI said that depositors will receive deposit insurance claim amount up to a monetary limit of Rs 5 lakh on liquidation.
“On liquidation, every depositor is entitled to receive deposit insurance claim amount from the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to a monetary limit of Rs 5,00,000/- (Rupees five lakh only) from the Deposit Insurance and Credit Guarantee Corporation (DICGC). The provisions thereof DICGC Act1961.”
“As per the data furnished by the bank, around 99% of the depositors are entitled to receive the full amount of their deposits from DICGC. As of September 13, 2022, DICGC The Bank has already paid Rs 193.68 crore of the Total Sum Assured under the provisions of Section 18A of the DICGC Act, 1961 based on the will received from the concerned depositors of the Bank.