According to the Reserve Bank, the bank does not have sufficient capital and earning potential, therefore the bank has been barred with immediate effect from other business as well as taking deposits and making payments
The Reserve Bank of India has canceled the license of Babaji Date Mahila Sahakari Bank Ltd., Yavatmal, Maharashtra. The Reserve Bank said on Friday that this cooperative bank does not have enough capital and earning potential, due to which this step has been taken. At the same time, according to the Reserve Bank, with this decision, most of the depositors of the cooperative bank will get their full money back. Quoting data provided by the bank, the Reserve Bank said that about 79 per cent of depositors are entitled to receive the full amount of their deposits from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
The decision came into effect from Friday
DICGC has already paid Rs 294.64 crore of the total Sum Assured till October 16, 2022. Consequent upon the cancellation of its licence, the Babaji Date Mahila Sahakari Bank Ltd. is prohibited from carrying on the business of ‘Banking’ which, inter alia, includes preventing it from taking and making deposits with immediate effect. Announcing the cancellation of the license of Babaji Date Mahila Sahakari Bank after the closure of business on Friday (November 11, 2022), the Reserve Bank said that the bank does not have sufficient capital and earning potential.
The Reserve Bank said, the bank with its current financial position would be unable to make full payments to its existing depositors, and public interest would be adversely affected if the bank is allowed to carry on its banking business.
