Categories: Banking

RBI cancels licence of Shivajirao Bhosale Sahakari Bank

The Reserve Bank of India (RBI) has cancelled the licence of Pune-based Shivajirao Bhosale Sahakari Bank. The bank ceases to carry on banking business, with effect from the close of business on May 31. The bank does not have adequate capital and earning prospects. As such, it does not comply with the provision of the Banking Regulation Act, 1949.

The RBI observed that the bank with its present financial position would be unable to pay its present depositors in full. The bank was placed under RBI Directions from the close of business on May 4, 2019.

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With the cancellation of licence and commencement of liquidation proceedings, the process of paying the depositors of the bank as per the Deposit Insurance and Credit Guarantee Corporation (DICGC). Act, 1961, will be set in motion. As per the data submitted by the bank, more than 98 per cent of the depositors will receive full amounts of their deposits from DICGC.

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Sumit Arora

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