Seva Vikas Cooperative Bank licence revoked by RBI: Seva Vikas Co-operative Bank, situated in Pune, had its licence revoked by the Reserve Bank of India (RBI) due to lack of sufficient capital and future earnings potential. With effect from the end of business on October 10, 2022, the bank stops conducting banking activity.
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Seva Vikas Cooperative Bank licence revoked by RBI: Key Points
- It has previously revoked the licence of the Rupee Cooperative Bank in Pune in August 2022.
- The Bombay High Court is hearing a judicial challenge to RBI action.
- Approximately 99% of depositors are eligible to retrieve the full value of their savings from the Deposit Insurance and Credit Guarantee Corporation, according to data provided by the bank (DICGC).
- From the entire insured deposits, DICGC had already paid out Rs. 152.36 crore as of September 14, 2022.
- Based on the consent provided by the relevant bank depositors, this payment is being made in accordance with the DICGC Act, 1961.
Seva Vikas Cooperative Bank licence revoked: Highlights
- RBI has requested for an order to be issued by the Maharashtra Commissioner for Cooperation and Registrar of Cooperative Societies to wind up the bank and appoint a liquidator for the bank.
- The bank’s continued existence was detrimental to the interests of its depositors. The bank would not be able to fully reimburse its current depositors given its current financial situation.
- It further stated that allowing the bank to continue operating its banking business would be detrimental to the public interest.
- In a separate regulatory action, the Reserve Bank of India (RBI) fined The Kerala State Co-operative Bank Ltd., Thiruvananthapuram, Rs. 48 lakh for failing to follow RBI guidelines on “Gold Loan – Bullet” and section 56 of the Banking Regulation Act, 1949 (the Act).
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