The Reserve Bank of India has cancelled the licence of Mumbai-based CKP Co-operative Bank to carry on banking business in the wake of its unsustainable financial position. The Registrar of Co-operative Societies, Maharashtra, has also been requested to issue an order for winding up the affairs of the bank and appoint a liquidator, the RBI said.
On liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation. The bank has a deposit base of Rs 486 crore.
According to the RBI, it cancelled the licence of the bank as the financial position of the bank is highly adverse and unsustainable. “There is no concrete revival plan or proposal for merger with another bank. Credible commitment towards revival from the management is not visible,” the RBI said.
“The bank is not satisfying the requirement of minimum capital and reserves, capital adequacy and earning prospects and also stipulated minimum regulatory capital requirement of 9 per cent,” it said. The bank is not in a position to pay its present and future depositors.
“The affairs of the bank were and are being conducted in a manner detrimental to the public interest and interest of the depositors and that the general character of the management of the bank is prejudicial to the interest of depositors as also public interest,” the RBI said. The bank’s efforts for revival have been far from adequate though the bank has been given ample time and opportunity and dispensations.
“No merger proposal has been received in respect of the bank. Thus, in all likelihood, public interest would be adversely affected if the bank were allowed to carry on its business any further,” it said.
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines