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Mumbai: The Reserve Bank of India (RBI) has cancelled the licence of Pune-based The Seva Vikas Co-operative Bank Ltd. The central bank said that the licence has been cancelled because of the company's earnings prospects and lack of capital.

Today, the Reserve Bank of India (RBI), vide order dated October 10, 2022, has cancelled the licence of "The Seva Vikas Co-operative Bank Ltd., Pune, Maharashtra." Consequently, the bank ceases to carry on banking business, with effect from the close of business on October 10, 2022, an official statement said.

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, the RBI said.

The statement said RBI cancelled the licence of the bank as it 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 RBI said.

"The continuance of the bank 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; and the public interest would be adversely affected if the bank is allowed to carry on its banking business any further," it added.

Consequent to the cancellation of its licence, the Seva Vikas Co-operative Bank Ltd., Pune, Maharashtra has been 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.

On liquidation, 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, about 99 per cent of the depositors are entitled to receive the full amount of their deposits from DICGC.

 

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Updated: 11 Oct 2022, 07:31 AM IST
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