The Reserve Financial institution of India (RBI) Thursday cancelled the licence of Solapur-based Laxmi Co-operative Financial institution Restricted.
Based on the RBI’s order, the financial institution would stop to hold on its banking companies from September 22 and the central financial institution has additionally requested the commissioner for cooperation and registrar of cooperative societies, Maharashtra, to concern an order for winding up the financial institution and appoint a liquidator for it.
Itemizing the explanations for cancelling the financial institution’s licence, the RBI said: “The financial institution doesn’t have sufficient capital and incomes prospects and as such, it doesn’t adjust to the provisions of Part 11(1) and Part 22 (3) (d) of the Banking Regulation Act, 1949. The continuance of the financial institution can be prejudicial to the pursuits of its depositors. The financial institution with its current monetary place can be unable to pay its current depositors in full and public curiosity can be adversely affected if the financial institution is allowed to hold on its banking enterprise any additional.”
The RBI’s order added, “On liquidation, each depositor can be entitled to obtain deposit insurance coverage declare quantity of his/her deposits as much as a financial ceiling of Rs 5,00,000 from Deposit Insurance coverage and Credit score Assure Company (DICGC) topic to the provisions of DICGC Act, 1961.”