The RBI has requested Commissioner for Cooperation and RCS, Maharashtra to issue an order for shutting down the day-to-day operations of the bank.
The Reserve Bank of India (RBI) has cancelled the licence of Vasantdada Nagari Sahakari Bank Ltd. The bank is located in Maharashtra's Osmanabad. The RBI has requested Commissioner for Cooperation and Registrar of Cooperative Societies (RCS), Maharashtra to issue an order for shutting down the day-to-day operations of the bank.The RBI has also requested the RCS to appoint a liquidator for Vasantdada Nagari Sahakari Bank Ltd.
"The Reserve Bank of India (RBI) has, vide order dated January 08, 2021 cancelled the licence of Vasantdada Nagari Sahakari Bank Ltd., Osmanabad, Maharashtra to carry on banking business, with effect from the close of business on January 11, 2021. The Commissioner for Cooperation and Registrar of Cooperative Societies (RCS), Maharashtra has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank," an official release said.
It is to be noted that Vasantdada Nagari Sahakari Bank Ltd will now not be allowed to conduct the business of ‘banking’, including acceptance of deposits and repayment of deposits.
The cancellation of licence and commencement of liquidation proceedings means that the process of paying the depositors of Vasantdada Nagari Sahakari Bank Ltd will be set in motion as per the DICGC Act.
Notably, when a bank is placed under liquidation, every depositor is entitled to repayment of his/her deposits up to a Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC) as per usual terms and conditions. According to RBI, over 99% of the depositors of Vasantdada Nagari Sahakari Bank Ltd will get full repayment of their deposits from DICGC.
The RBI decided to cancel Vasantdada Nagari Sahakari Bank Ltd's license as the bank has failed to comply with the requirements of Section 11(1) read with Section 56 of BR Act; the bank has become disentitled to carry on the business of banking in India, by reason of the cancellation of its licence issued to it by the Reserve Bank of India, under Section 22(1) read with Section 56 of BR Act as it 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) of BR Act.
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