RBI cancels licence of Kolhapur-based Shankarrao Pujari Nutan Nagari Sahakari Bank

The Reserve Bank of India (RBI), Monday cancelled the licence of Kolhapur-based Shankarrao Pujari Nutan Nagari Sahakari Bank Limited, Ichalkaranji and asked the bank not to carry on any banking business, with effect from the close of business on December 4, 2023.

“Shankarrao Pujari Nutan Nagari Sahakari Bank Limited, Ichalkaranji, Kolhapur is prohibited from conducting the business of ‘banking’ which includes, among other things, 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 Reserve Bank said.

The apex bank said the Shankarrao Pujari Nutan Nagari Sahakari 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.

Also Read | Byju Raveendran pledges homes to raise funds for staff salaries

The banking regulator also said the co-operative bank has failed to comply with certain sections of the Banking Regulation Act, 1949.

The Reserve Bank further said the public interest would be adversely affected if the United India Co-operative Bank is allowed to carry on its banking business any further as the bank with its present financial position would be unable to pay its present depositors in full.

Also Read | Number of active companies crosses 1.6 million, led by service sector: MCA

On liquidation, the Reserve Bank said that every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of ₹5,00,000 from Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of DICGC Act, 1961. As per the data submitted by the bank, 99.85% of the depositors are entitled to receive the full amount of their deposits from DICGC. 

The RBI further said as of July 24, DICGC has already paid ₹41.60 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.

Also Read | Cyclone Michaung news: Foxconn, Pegatron halts iPhone production near Chennai as heavy rains pound Tamil Nadu

The RBI has directed the Commissioner for Cooperation and Registrar Cooperative Societies, Maharashtra to issue an order for winding up the bank and appoint a liquidator for the bank.

Earlier in the day, the Reserve Bank imposed monetary penalties on four co-operative banks for deficiencies in regulatory compliance. These co-operative banks are: Jijamata Mahila Sahakari Bank Ltd, Shri Laxmikrupa Urban Co-operative Bank Ltd, The Konark Urban Cooperative Bank Ltd and The Chembur Nagarik Sahakari Bank Ltd.