In a press release dated 10th August, the RBI announced that on 8th August, the licence of the Pune-based Rupee Cooperative Bank was terminated in compliance with the Hon’ble High Court of Bombay order dated September 12, 2017.
The order will become effective after six weeks from today 10th August. Consequently, the bank will cease to carry on banking business, with effect from September 22, 2022. The Commissioner for Cooperation and Registrar of Cooperative Societies, 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 cancelled the bank’s license for the following reasons;
- The bank does not have adequate capital and earning prospects.
- Section 56 of the Banking Regulation Act, 1949.
- The bank in its current financial state is unable to pay its depositors.
- The public interest would be adversely affected if the bank is allowed to carry on its banking business any further.
The bank is prohibited from conducting any form of business of banking which includes acceptance of deposits and repayment of deposits. This comes into action on 22nd September 2022
On liquidation, every depositor of the bank 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. More than 99% of depositors are eligible to receive the full value of their deposits from DICGC, according to data provided by the bank. According to Section 18A of the DICGC Act, 1961, DICGC has already paid out 700.44 crore of the total insured deposits as of May 18, 2022, depending on the expressed willingness of the affected bank depositors.