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MUMBAI : The Reserve Bank of India (RBI) on Thursday said it has cancelled the licence of The Madgaum Urban Co-operative Bank Limite, Margao, Goa as the bank with its current financial position was not in a position to pay its present depositors in full.

The central bank said that as per the data submitted by The Madgaum Urban Co-operative Bank, Margao, Goa about 99% of the depositors will receive full amounts of their deposits from the Deposit Insurance and Credit Guarantee Corporation (DICGC). On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of 5 lakh only from the DICGC.

The RBI further said it has cancelled the licence of the bank as: 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 section 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, and the continuance of the bank is prejudicial to the interests of its depositors.

The RBI said 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.

The RBI further said the Office of Registrar of Cooperative Societies, Goa, has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank.

"Consequent to the cancellation of its licence, The Madgaum Urban Co-operative Bank Limited, Margao, Goa is prohibited from conducting the business of 'banking' which includes acceptance of deposits and repayment of deposits...with immediate effect," the central bank said.

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