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The Reserve Bank of India (RBI) on Wednesday said it has cancelled the licence of Sarjeraodada Naik Shirala Sahakari Bank Ltd, Shirala, Sangli District, Maharashtra, as it 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 March 2, 2022, the Reserve Bank of India said in a statement.

On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5,00,000 from Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of the DICGC Act, 1961.

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As per the data submitted by the bank, more than 99 percent of the depositors are entitled to receive the full amount of their deposits from DICGC.

As of January 27, 2022, DICGC has sanctioned Rs 64.70 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.

Continuance of the bank, RBI said, is prejudicial to the interests of its depositors, and with its present financial position, it would be unable to pay its depositors in the full and public interest would be adversely affected if the bank is allowed to carry on its banking business any further.

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.

(Edited by : Jomy Jos Pullokaran)

First Published:  IST

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