RBI Cancels Licence of Ajantha Urban Co-op Bank Maryadit

Reserve Bank of India (RBI) announced the cancellation of the banking license of Ajantha Urban Co-operative Bank Maryadit, based in Aurangabad, Maharashtra. The action was taken due to the bank’s inadequate capital, poor earnings outlook, and inability to protect depositors’ interests. Following the cancellation, the RBI directed the Registrar of Cooperative Societies, Maharashtra, to initiate liquidation proceedings, ensuring depositor protection through the Deposit Insurance and Credit Guarantee Corporation (DICGC).

Key Points

Why RBI Cancelled the Licence

• The bank failed to maintain adequate capital, a key requirement under regulatory norms.
• It lacked viable earning prospects, making its revival unfeasible.
• RBI found that the bank was unable to repay its current depositors in full, jeopardizing public interest.
• Continued operation of the bank was deemed prejudicial to depositor safety and the financial system.
• Hence, the RBI revoked its license under powers granted by the Banking Regulation Act.

Consequences of License Cancellation

• The bank ceased all banking operations from the close of business on April 22, 2025.
• It can no longer accept or repay deposits, provide loans, or engage in any banking activities.

The Registrar of Cooperative Societies has been asked to,

• Wind up the bank, and
• Appoint a liquidator to manage the liquidation process.

Impact on Depositors

• Depositors are protected under the Deposit Insurance and Credit Guarantee Corporation (DICGC) scheme.
• Each depositor is eligible to receive up to ₹5 lakh as insurance on their deposits.

According to data from the bank

• 91.55% of the depositors will receive the full amount of their deposits under the ₹5 lakh limit.
• As of April 3, 2025, the DICGC had already paid ₹275.22 crore in insured deposits.

About Ajantha Urban Co-operative Bank Maryadit

• A cooperative bank based in Aurangabad, Maharashtra.
• Had been facing persistent financial stress, with limited earning capacity and no sustainable revival prospects.
• Its continuance was no longer viable in the eyes of the regulator.