Categories: Banking

RBI cancels licence of Maharashtra-based Karad Janata Sahakari Bank

The Reserve Bank of India has cancelled the licence of Karad Janata Sahakari Bank Ltd in Maharashtra, as it does not have adequate capital and earning prospects. As such, it does not comply with the provisions of the Banking Regulation Act, 1949. More than 99 per cent of the depositors of the bank will get full payment of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC).

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With the cancellation of licence and beginning of liquidation proceedings, the process of paying the depositors of Karad Janata Sahakari Bank will be set in motion. On liquidation, every depositor is entitled to repayment of their deposits up to ₹ 5 lakh only from the DICGC. After cancellation of licence from the close of a business hour on December 7, the bank cannot work anymore, which includes taking deposits and repaying deposits.

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Sumit Arora

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