The Reserve Bank of India (RBI) on Thursday terminated the license of Solapur-based Laxmi Co-operative Bank Limited.
According to the RBI order, the bank would cease its banking operations from September 22 and the central bank has also requested the Cooperation Commissioner and the Registrar of Cooperatives of Maharashtra to issue an order for the winding up of the bank and appoint a liquidator for it.
Regarding the reasons for the withdrawal of the banking license, RBI said, “The bank does not have sufficient capital and revenue prospects and therefore does not comply with the provisions of Article 11(1) and section 22(3)(d) of the Banking Regulations Act 1949.
The continued existence of the bank is also detrimental to the interests of its depositors. The bank, in its present financial condition, would not be able to pay its debts in full. current depositors and the public interest would be harmed if the bank were allowed to continue banking.
The RBI order added: “In the event of liquidation, each depositor would be entitled to receive the right to deposit insurance of their deposits up to a monetary limit of Rs 5,00,000 from the Deposit Insurance Corporation. and Credit Guarantee (DIGCC), subject to the provisions of the DICGC Act 1961.”