RBI cancels licence of Nashik based Independence Co-operative Bank Limited

The Reserve Bank of India (RBI) has cancelled the licence of Nashik-based Independence Co-operative Bank Limited. According to an official statement, the bank will not be allowed to carry out any operations henceforth and a liquidator will be appointed soon.

RBI in a release said, "The Reserve Bank of India (RBI), vide order dated February 02, 2022, has cancelled the licence of Independence Co-operative Bank Ltd., Nashik, Maharashtra. Consequently, the bank ceases to carry on banking business, with effect from the close of business on February 03, 2022. 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."

RBI has clarified that the bank does not have adequate capital and earning prospects. As such, 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 regulator, RB, said that the bank's present financial position is such that it will not be able to pay its depositors in the full and public interest would be adversely affected if the bank is allowed to carry on with its business any further.

RBI has said that post liquidation, every depositor will be entitled to receive deposit insurance claim amount up to a monetary ceiling of five lakh rupees only. The apex bank has said that more than 99 per cent of the depositors are entitled to receive the full amount of their deposits from Deposit Insurance and Credit Guarantee Corporation.