MUMBAI: The Reserve Bank of India (RBI) on Wednesday said it has cancelled the banking licenses of two co-operative banks in Maharashtra and Karnataka.
The licenses of Malkapur Urban Co-operative Bank Ltd, Buldhana and Shushruti Souharda Sahakara Bank Niyamita, Bengaluru have been cancelled.
The two co-operative banks ceased to carry on banking business with effect from the close of business on Wednesday, RBI said in two separate statements.
These banks did not have adequate capital and earning prospects, RBI said, adding that with their present financial position, they would be unable to pay their present depositors in full.
On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
In the case of Malkapur Urban Co-operative Bank, RBI said as per the data submitted by the bank, 97.60 per cent of the depositors are entitled to receive full amount of their deposits from DICGC.
DICGC has already paid Rs 496.98 crore of the total insured deposits.
Regarding Shushruti Souharda Sahakara Bank Niyamita, RBI said as per the data submitted by the lender, 91.92 per cent of the depositors are entitled to receive full amount of their deposits from DICGC.
As on May 31, 2023, DICGC has paid Rs 54.16 crore of the total insured deposits.