NEW DELHI: The Reserve Bank of India (RBI) on Thursday cancelled licence of The Laxmi Co-operative Bank Limited in Solapur, Maharashtra citing inadequate capital and earning prospects.
As a result, the bank has been prohibited from conducting the business of ‘banking’ which includes, among other things, acceptance of deposits and repayment of deposits.
“The bank with its present financial position would be unable to pay its present depositors in full,” the RBI said in an official release.
Public interest would be adversely affected if the bank is allowed to carry on its banking business any further, it added.
Depositors will be entitled to receive deposit insurance claim amount up to a monetary ceiling of Rs 5 lakh, the RBI said.
As per the data submitted by the bank, about 99% of the depositors are entitled to receive full amount of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC).