RBI cancels licence of Sangli-based Sarjeraodada Naik Shirala Sahakari Bank

The Reserve Bank of India (RBI) on Wednesday cancelled the licence of Sarjeraodada Naik Shirala Sahakari Bank Ltd, Shirala in Maharashtra's Sangli district over lack of adequate capital and earning prospects.
 
In a release, the RBI added that the bank's licence was cancelled as it failed to comply with various sections of the Banking Regulation Act.
 
The continuance of the bank is prejudicial to the interests of its depositors and with its present financial position, it would be unable to pay its present depositors in full, the release said. Besides, the public interest would be adversely affected if the bank is allowed to carry on its banking business any further, it added.
 
"Consequently, the bank ceases to carry on banking business, with effect from the close of business on March 02, 2022. The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank," the RBI said.
 
Sarjeraodada Naik Shirala Sahakari Bank has been prohibited from conducting the business of 'banking', which includes acceptance of deposits and repayment of deposits, with immediate effect.
 
On liquidation, every depositor with the bank would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC), subject to the provisions of the DICGC Act, 1961.

"As per the data submitted by the bank, more than 99 per cent of the depositors are entitled to receive full amount of their deposits from DICGC. As on January 27, 2022, DICGC has sanctioned Rs 64.70 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act,1961 based on the willingness received from the concerned depositors of the bank," the release said.

Also Read: Russia-Ukraine war's impact on global economy: What's at stake?

Also Read: Fed to increase interest rates this month: Jerome Powell tells Congress