The Reserve Financial institution of India (RBI) Friday cancelled the licence of Maharashtra-based Babaji Date Mahila Sahakari Financial institution Restricted in Yavatmal, citing that the lender didn’t have sufficient capital and incomes prospects.
Based on the information submitted by the financial institution, the RBI mentioned about 79 per cent of the depositors are entitled to obtain full quantity of their deposits from the Deposit Insurance coverage and Credit score Assure Company (DICGC).
As on October 16, 2022, DICGC has paid Rs 294.64 crore of the full insured deposits.
Amid deterioration within the lender’s monetary place, the RBI, on Monday, imposed a number of restrictions on the financial institution, together with capping withdrawals at Rs 5,000 for patrons.
Owing to the cancellation of its licence, Babaji Date Mahila Sahakari Financial institution Restricted has been prohibited from offering banking companies similar to acceptance of deposits and reimbursement of deposits with instant impact, amongst others.
Whereas saying the cancellation of the financial institution’s licence with impact from the shut of enterprise on Friday (November 11, 2022), the RBI mentioned in its order that the financial institution doesn’t have sufficient capital and incomes prospects.
“The financial institution with its current monetary place could be unable to pay its current depositors in full; and public curiosity could be adversely affected if the financial institution is allowed to hold on its banking enterprise any additional,” the RBI mentioned.
“The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra has additionally been requested to subject an order for winding up the financial institution and appoint a liquidator for the financial institution,” the RBI order added.
On liquidation, each depositor could be entitled to obtain a deposit insurance coverage declare quantity of his/her deposits as much as a financial ceiling of Rs 5 lakh from DICGC.
(With inputs from PTI)