BackRBI cancels licence of The Kapol Co-operative Bank over earnings prospects
The bank has been prohibited from conducting the business of ‘banking’ which includes, among other things, acceptance of deposits and repayment of deposits with immediate effect.
PremiumThe Reserve Bank of India (RBI) has cancelled the licence of Mumbai-based The Kapol Co-operative Bank Limited as the lender does not have adequate capital and earning prospects. Upon the cancellation of the licence, the cooperative bank has been prohibited from conducting the business of ‘banking’ which includes, among other things, acceptance of deposits and repayment of deposits with immediate effect, the RBI said in a statement.
The Additional Secretary & Central Registrar of Cooperative Societies, Ministry of Cooperation, has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank, according to the central bank's statement.
On liquidation, the RBI said every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of ₹5 lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC).
Around 96.09 per cent of the depositors are entitled to receive full amount of their deposits from DICGC. Giving details, the RBI said the bank does not have adequate capital and earning prospects and its continuance is prejudicial to the interests of its depositors.
"The bank with its present financial position would be unable to pay its present depositors in full," the RBI said. As of July 24, 2023, DICGC has already paid ₹230.16 crore of the total insured deposits based on the willingness received from the concerned depositors of the bank.
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