The Reserve Financial institution of India (RBI) has cancelled the licence of the Maharashtra-based Shivam Sahakari Financial institution. The explanation cited the absence of enough capital and incomes prospects as the explanation behind the cancellation.
“Consequently, the financial institution ceases to hold on banking enterprise, with impact from the shut of enterprise on January 29, 2021,” the central financial institution stated in a press release.
As per the information submitted by the Kolhapur-based financial institution, greater than 99 per cent of the depositors are absolutely insured by Deposit Insurance coverage and Credit score Assure Company (DICGC).
“On liquidation, each depositor could be entitled to obtain deposit insurance coverage declare quantity of his/her deposits as much as a financial ceiling of Rs 5,00,000 from the DICGC…,” the central financial institution stated.
The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra has additionally been requested to challenge an order for winding up the financial institution and appoint a liquidator for the financial institution, it added.
Giving particulars, the RBI stated the co-operative financial institution doesn’t have enough capital and incomes prospects, and the continuance of the financial institution is prejudicial to the pursuits of its depositors;
“The financial institution with its current monetary place could be unable to pay its current depositors in full,” RBI stated, and added public curiosity could be adversely affected if the financial institution is allowed to hold on its banking enterprise any additional.
With the cancellation of licence and graduation of liquidation proceedings, the method of paying the depositors of Shivam Sahakari Financial institution as per the DICGC Act, 1961 shall be set in movement.
(With PTI Inputs)