RBI cancels the licence of Pune-based Seva Vikas Co-operative Bank- QHN

Reserve Bank of India (RBI) on Monday cancelled the license of Pune based Seva Vikas Co-operative Bank as the urban cooperative bank lacked adequate capital and earning prospects.

The bank ceases to carry on banking business, with effect from the close of business on October 10, 2022, RBI said in a statement. Earlier in August 2022 , it had cancelled the license of Pune-based Rupee Cooperative Bank. RBI action is facing legal challenge in Bombay High Court.

According to the the data submitted by the bank, about 99 per cent of the depositors are entitled to receive the full amount of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC). As on September 14, 2022, DICGC has already paid Rs 152.36 crore of the total insured deposits.

This payment is made in compliance with the provisions of the DICGC Act, 1961 based on the willingness received from the concerned depositors of the bank.

Banking regulator said it has requested the Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra to issue an order for winding up the bank and appoint a liquidator for the bank.

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

In another regulatory action, RBI imposed a monetary penalty of Rs 48 lakh on The Kerala State Co-operative Bank Ltd, Thiruvananthapuram for non-compliance with the provisions of section 56 of Banking Regulation Act, 1949 (the Act) and directions issued by RBI on ‘Gold Loan – Bullet Repayment’.