The Reserve Bank of India (RBI) on Wednesday said it has canceled the license of Maharashtra-based Sarzerodada Naik Shirala Sahakari Bank Limited. RBI said that the cooperative bank does not have sufficient capital and earning potential, due to which the decision to cancel its license had to be taken. The headquarters of this cooperative bank is located at Shirala in Sangli district of Maharashtra.
“With the license cancelled, the banking business of Sarjerodada Naik Shirala Sahakari Bank Limited has been closed at the end of the business day on Wednesday,” the RBI said in a statement. According to the statement, Maharashtra’s Cooperation Commissioner and Registrar of Cooperative Societies have also been requested to issue orders to close the bank and appoint a liquidator for it.
What will happen to the customers whose money is deposited in the bank?
RBI said that all the customers who have deposited money in the bank can claim their money under the DICGC Act, 1961. Through this claim, customers will get the amount deposited in the bank up to Rs 5 lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC).
Also read- Stock Market: Investors lost ₹ 86,742 crore in the stock market, decline due to Russia-Ukraine crisis
According to the bank’s data, 99 percent of the depositors of the bank will get the entire amount deposited in their account. This is because he has less than Rs 5 lakh deposited in his account. Till January 27, 2022, DICGC has approved a total of Rs 64.70 crore as insurance claims based on the requests received from the bank’s depositors.
RBI said that keeping the bank operational was not in the interest of customers and especially depositors. The current situation of the bank is not such that it can return the entire amount to its depositors on demand. In such a situation, if the bank is allowed to continue functioning, it will affect public interest.