Reserve Bank of India – Press Releases

Today, the Reserve Bank of India (RBI), vide order dated September 14, 2022, has cancelled the licence of “The Laxmi Co-operative Bank Limited, Solapur, Maharashtra”. Consequently, the financial institution ceases to hold on banking business, with impact from the shut of business on September 22, 2022. The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra has additionally been requested to problem an order for winding up the financial institution and appoint a liquidator for the financial institution.

The Reserve Bank cancelled the licence of the financial institution as:

1. The financial institution doesn’t have enough capital and incomes prospects. As such, it doesn’t adjust to the provisions of Section 11(1) and Section 22 (3) (d) learn with Section 56 of the Banking Regulation Act, 1949.

2. The financial institution has did not adjust to the necessities of Sections 22(3) (a), 22 (3) (b), 22(3)(c), 22(3) (d) and 22(3)(e) learn with Section 56 of the Banking Regulation Act, 1949;

3. The continuance of the financial institution is prejudicial to the pursuits of its depositors;

4. The financial institution with its current monetary place can be unable to pay its current depositors in full; and

5. Public curiosity can be adversely affected if the financial institution is allowed to hold on its banking business any additional.

2. Consequent to the cancellation of its licence, “The Laxmi Co-operative Bank Limited, Solapur, Maharashtra” is prohibited from conducting the business of ‘banking’ which incorporates, amongst different issues, acceptance of deposits and reimbursement of deposits as outlined in Section 5(b) learn with Section 56 of the Banking Regulation Act, 1949 with speedy impact.

3. On liquidation, each depositor can be entitled to obtain deposit insurance declare quantity of his/her deposits as much as a financial ceiling of ₹5,00,000/- (Rupees 5 lakh solely) from Deposit Insurance and Credit Guarantee Corporation (DICGC) topic to the provisions of DICGC Act, 1961. As per the information submitted by the financial institution, about 99% of the depositors are entitled to obtain full quantity of their deposits from DICGC. As on September 13, 2022, DICGC has already paid ₹193.68 crore of the entire insured deposits beneath the provisions of Section 18A of the DICGC Act, 1961 based mostly on the willingness obtained from the involved depositors of the financial institution.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2022-2023/914