RBI urges Additional Secretary, Ministry of Cooperation and Central Registrar of Co-operative Societies to issue orders clearing banks | Image Source: iStockphoto
The Reserve Bank of India (RBI) has canceled the license of Mumbai-based ‘Kapol Cooperative Bank Limited’.
Therefore, according to the central bank statement, the bank will cease banking operations from the close of business on September 25, 2023.
On liquidation, each depositor is entitled to receive deposit insurance claim amount up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC) under the provisions of the DICGC Act, 1961. .
The Reserve Bank of India said that based on data submitted by the bank, 96.09% of depositors are entitled to receive full deposits from DICGC.
According to the central bank, as on July 24, 2023, DICGC has disbursed Rs 230.16 crore of the total insured deposits in accordance with the wishes of the bank’s depositors concerned under Section 18A of the DICGC Act, 1961.
Reserve Bank of India urges Central Registrar of Co-operative Societies to appoint liquidator
The RBI said the Additional Secretary, Ministry of Cooperation and Central Registrar of Co-operative Societies, Government of India, has also been asked to issue an order for liquidation of the bank and appoint a liquidator for the bank.
The Reserve Bank said the license of Kapol Co-operative Bank has been canceled as the bank does not have adequate capital and profit prospects and its continued existence would be detrimental to the interests of depositors.
The Reserve Bank of India noted that with the bank’s current financial position, it will not be able to make full payments to existing depositors; if the bank is allowed to carry out further banking operations, public interest will be adversely affected.