The Reserve Bank of India (RBI) has cancelled the licence of Shankarrao Pujari Nutan Nagari Sahakari Bank Limited in Kolhapur city.  The Commissioner for Cooperation and Registrar Cooperative Societies, Maharashtra, has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank.

According to RBI, the licence was cancelled as the bank does not have adequate capital and earning prospects and 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 also failed to comply with various other sections of the Banking Regulation Act, 1949.

“The continuance of the bank is prejudicial to the interests of its depositors. The bank with its present financial position would be unable to pay its present depositors in full; and public interest would be adversely affected if the bank is allowed to carry on its banking business any further,” RBI stated in a press release.

Consequent to the cancellation of its licence, Shankarrao Pujari Nutan Nagari Sahakari Bank has been prohibited from conducting the business of ‘banking’ which includes, among other things, acceptance of deposits and repayment of deposits as defined in Section 5(b) read with Section 56 of the Banking Regulation Act, 1949 with immediate effect.

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 from Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of DICGC Act, 1961.

As per the data submitted by the bank, 99.85 per cent of the depositors are entitled to receive full amount of their deposits from DICGC. As on July 24, 2023, DICGC has already paid ₹41.60 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961, based on the willingness received from the concerned depositors of the bank.

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