RBI cancels Laxmi Co-operative Bank's license

23 Sep 2022 , 07:49 AM

Laxmi Co-operative Bank Limited, situated in Solapur, had its license revoked by the RBI on Thursday because it had violated several articles of the Banking Regulation Act of 1949.

“The Reserve Bank revoked the bank’s license because it lacked sufficient capital and future earnings potential. Therefore, it does not adhere to the rules of Sections 11(1) and 22(3)(d) read in conjunction with Section 56 of the Banking Regulation Act, 1949. According to a statement from the central bank, the bank “has failed to comply with the requirements of Sections 22(3)(a), 22(3)(b), 22(3)(c), 22(3)(d), and 22(3)(e) read with Section 56 of the Banking Regulation Act, 1949.”

With effect from the close of business on September 22, 2022, the lender will cease conducting banking operations.

With immediate effect, it is forbidden for “The Laxmi Co-operative Bank Limited, Solapur, Maharashtra” to engage in banking activity, which includes, among other things, accepting deposits and repaying deposits as specified in Section 5(b) read with Section 56 of the Banking Regulation Act, 1949.

The RBI stated that upon liquidation, depositors will get a deposit insurance claim sum up to a maximum of Rs5 lakh.

“99% of depositors are eligible to retrieve the full value of their deposits from DICGC, according to data provided by the bank. Based on the desire shown by the concerned depositors of the bank, as of September 13, 2022, the DICGC had already paid Rs193.68 crore of the total insured deposits under Section 18A of the DICGC Act, 1961 “It read.

For feedback and suggestions, write to us at [e-mail]