The Reserve Bank of India (RBI) on Thursday terminated the licence of Maharashtra based Laxmi Co-operative Bank, citing inadequate capital and earning prospects. As a result, the bank will no longer conduct banking operations as of September 22, 2022.
According to an official statement issued by the RBI on September 22, "the bank has been prohibited from conducting the business of 'banking,' which includes, among other things, acceptance of payments and repayment of deposits, with immediate effect."
“The continuance of the bank is prejudicial to the interests of its depositors,” the RBI added. "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.”
On liquidation, every depositor will be entitled to a deposit insurance claim amount of up to a monetary ceiling of Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC), RBI said.
According to the bank's data, about 99 percent of depositors are entitled to collect the entire value of their deposits from the DICCC.
As of September 13, 2022, the DICGC has already paid 193.68 crore of the total insured deposits.
Also read: ICICI Bank launches ‘Festive Bonanza’ — check list of discount available on brands and loan offers
(Edited by : Shoma Bhattacharjee)
First Published: Sept 22, 2022 8:54 PM IST
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