RBI cancels Solapur-based The Laxmi Co-operative Bank’s licence

BL Mumbai Bureau | Updated on: Sep 22, 2022

FILE PHOTO: A man walks behind the Reserve Bank of India (RBI) logo inside its headquarters in Mumbai, India, April 8, 2022. REUTERS/Francis Mascarenhas/File Photo | Photo Credit: FRANCIS MASCARENHAS

Bank didn’t have adequate capital and earning prospects; continuance is prejudicial to interests of its depositors, says Statement

The Reserve Bank of India has cancelled the licence of Solapur-based The Laxmi Co-operative Bank. Consequently, the bank ceases to carry on banking business, with effect from the close of business on September 22, the central bank said in a statement.

The bank’s licence has been cancelled as it does not have adequate capital and earning prospects and its continuance is prejudicial to the interests of its depositors, as per the statement.

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

The central bank said the Commissioner for Cooperation and Registrar of Co-operative Societies, Maharashtra has been requested to issue an order for winding up the bank and appoint a liquidator for the bank.

On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of ₹5 five lakh only) from Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of DICGC Act, 1961.

“As per the data submitted by the bank, about 99 per cent of the depositors are entitled to receive full amount of their deposits from DICGC. As on September 13, 2022, DICGC has already paid ₹193.68 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,” according to the statement.

Published on September 22, 2022
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