RBI cancels licence of Karnala Nagari Sahakari Bank of Maharashtra

The bank’s licence was cancelled by RBI through an order dated August 9, 2021.

On Friday, the Reserve Bank of India (RBI) cancelled the licence of Karnala Nagari Sahakari Bank of Maharashtra for having not having adequate capital, failing to pay its present depositors in full as well as not complying with the requirements of various sections of the Banking Regulation Act, 1949.

According to the central bank, the bank ceased to carry on banking business with effect from the close of business on 13th August 2021.

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“As per the data submitted by the bank, 95 per cent of the depositors will receive full amounts of their deposits from Deposit Insurance and Credit Guarantee Cooperation (DICGC)”, announced the RBI.

While announcing the licence cancellation, the central bank added that public interest would be adversely affected if the bank is allowed to continue its banking business any further.

The apex bank said that the Commissioner for Cooperation and Registrar of Cooperative Societies (Maharashtra) has been requested to issue an order for winding up the bank and the appointment of a liquidator.

Furthermore, on liquidation, every depositor would be entitled to receive deposit insurance claim amount of their deposits up to a ₹5 lakh monetary ceiling from DICGC.

From now on, Karnala Nagari Sahakari Bank will not be able to do banking business including the acceptance of deposits and repayment of deposits.