The Licence of the Mumbai based banks are being cancelled by the RBI

On Saturday the Reserve Bank of India had cancelled the licence of all the city-based CKP co-operative bank as its financial position is unsustainable and also not in a position to pay to its depositors. 

The bank is not able to satisfy the stipulated minimum regulatory capital requirement of 9 per cent, as said by the RBI while cancelling the licence from the close of business on April 30. 

“Consequent to the cancellation of its licence, The CKP Co-operative Bank Ltd, Mumbai, is prohibited from conducting the business of ‘banking’ which includes acceptance of deposits and repayment of deposits…” it said.

Along with the cancellation of the licence and the commencement of liquidation proceedings, also the process of paying the depositors of the co-operative bank according to the DICGC Act, 1961 will be set in the motion. “On liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of Rs 5,00,000 from the Deposit Insurance and Credit Guarantee Corporation (DICGC) as per usual terms and conditions,” the RBI said.

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Giving details, the RBI said the financial position of the bank is highly adverse and unsustainable. There is no concrete revival plan or proposal for a merger with another bank. Besides this, an incredible commitment towards the revival from the management is also not visible. RBI said that the bank is not in a position to pay its present and future depositors. 

The RBI further said that the affairs of the bank “were and are” being conducted in a manner which is detrimental to the public interest and interest of the depositors and that the general character of the management of the bank is prejudicial to the interest of depositors as also the public interest.

The Registrar of the Co-operative Societies, Pune has been asked to issue an order for winding up the affairs of The CKP Co-operative Bank and appoint a liquidator for the bank.

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