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The Reserve Bank of India (RBI) has cancelled the licence of The City Co-operative Bank Ltd, Mumbai as “the bank does not have adequate capital and earning prospects”.
“Consequently, the bank ceases to carry on banking business, with effect from the close of business on June 19, 2024. The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank,” the RBI said.
The bank has failed to comply with the requirements of Sections of the Banking Regulation Act, 1949, the RBI said. “The continuance of the bank is prejudicial to the interests of its depositors. The bank with its present financial position would be unable to pay its present depositors in full and public interest would be adversely affected if the bank is allowed to carry on its banking business any further,” it said.
On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs five lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of DICGC Act, 1961.
As per the data submitted by the bank, about 87% of the depositors are entitled to receive full amount of their deposits from DICGC, the RBI said. As on June 14, 2024, DICGC has already paid Rs 230.99 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961 based on the willingness received from the concerned depositors of the bank, it said.
