The Reserve Bank of India (RBI) Friday cancelled the licence of Maharashtra-based Babaji Date Mahila Sahakari Bank Limited in Yavatmal, citing that the lender did not have adequate capital and earning prospects.
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According to the data submitted by the bank, the RBI said about 79 per cent of the depositors are entitled to receive full amount of their deposits from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
As on October 16, 2022, DICGC has paid Rs 294.64 crore of the total insured deposits.
Amid deterioration in the lender’s financial position, the RBI, on Monday, imposed several restrictions on the bank, including capping withdrawals at Rs 5,000 for customers.
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Owing to the cancellation of its licence, Babaji Date Mahila Sahakari Bank Limited has been prohibited from providing banking services such as acceptance of deposits and repayment of deposits with immediate effect, among others.
While announcing the cancellation of the bank’s licence with effect from the close of business on Friday (November 11, 2022), the RBI said in its order that the bank does not have adequate capital and earning prospects.
“The bank with its present financial position would be unable to pay its present depositors in full; and public interest would be adversely affected if the bank is allowed to carry on its banking business any further,” the RBI said.
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“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 order added.
On liquidation, every depositor would be entitled to receive a deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5 lakh from DICGC.
(With inputs from PTI)
