The Laxmi Co-operative Bank Limited’s license has been revoked, according to the RBI, since the lender lacks sufficient capital and growth potential. Solapur, Maharashtra-based The Laxmi Co-operative Bank Limited was formerly licensed.
More than 98% of depositors are eligible to collect the full value of their savings from the Deposit Insurance and Credit Guarantee Corporation (DICGC), according to information provided by the cooperative bank, the RBI stated in a statement.
Also Read: Ashwini Vaishnaw produces draft of the Indian Telecommunications Bill 2022
The DICGC further stated that as of September 13, 2022, it had already paid out 193.68 crore of the total insured deposits. The Laxmi Co-operative Bank will no longer conduct banking activities, the RBI announced, effective at the close of business on Thursday.
“The bank does not have appropriate capital and earning potential” (September 22, 2022). The co-operative bank has allegedly violated the Banking Regulation Act of 1949, and its continued existence is detrimental to the interests of its depositors.
According to the RBI, “The bank with its current financial situation would be unable to pay its present depositors in full.” Following the termination of its license, the bank is no longer allowed to engage in the practice of “banking,” which involves, among other things, accepting and returning deposits.
The central bank continued by asking the Commissioner for Cooperation and Registrar of Cooperative Societies in Maharashtra to issue an order winding up the bank and appoint a liquidator for the bank.
Also Read: Use force if Iran builds nuclear weapons: Israeli PM Yair Lapid
Each depositor would be eligible to collect a deposit insurance claim sum of up to 5 lakh from DICGC upon liquidation. The closure of Laxmi Co-operative Bank Limited is among the biggest announcements made by the Reserve Bank of India in 2022.
