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Licence of a leading co-operative bank in the state cancelled by Reserve Bank

Reserve Bank of India has revoked the licence of a prominent co-operative bank in Maharashtra. The apex bank has revoked the licence of CKP Co-operative Bank, based in Mumbai.

The bank has now approached the Maharashtra state government. The bank authorities has decided to approach the Maharashtra government seeking a capital infusion of Rs. 240 crore. “We are drafting a letter to be sent to the government, requesting it to put the liquidation on hold,” said Moreshwar Dhaimodkar,  general manager  of the Mumbai-based co-operative bank.

The RBI on 2 May  has cancelled the licence of CKP Co-operative Bank Ltd for reasons including, the lack of any viable revival plan and functioning “in a manner detrimental to the public interest and interest of the depositors”. The Registrar of Co-operative Societies, Pune has been asked to issue an order for winding up the affairs of The CKP Co-operative Bank and appoint a liquidator for the bank.

In May 2014, RBI had put curbs on bank under Section 35A of the Banking Regulation Act, capping deposit withdrawals at ?1,000.

Following the RBI’s recent decision to cancel the licence, the bank now stares at liquidation and its depositors will get up to ?5 lakh under the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act.  Out  1,32,170 depositors of the bank, about 99.2% will get full payment of their deposits from DICGC. This means that only 0.8% of its depositors had more than ?5 lakh in their bank accounts.

 

 

 

 

 

 

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