RBI Cancels License Of Mumbai-Based 'The Kapol Co-Operative Bank'

The RBI on Monday said it has cancelled the license of Mumbai-based The Kapol Co-operative Bank Limited as the lender does not have adequate capital and earning prospects.

Consequent to the cancellation of the license, the cooperative bank has been prohibited from conducting the business of 'banking' which includes, among other things, acceptance of deposits and repayment of deposits with immediate effect, the Reserve Bank said in a statement.

The Additional Secretary & Central Registrar of Cooperative Societies, Ministry of Cooperation, has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank, it said.

On liquidation, the RBI said every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5 lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC).

About 96.09 per cent of the depositors are entitled to receive full amount of their deposits from DICGC.

Giving details, the RBI said the bank does not have adequate capital and earning prospects and its continuance is prejudicial to the interests of its depositors.

"The bank with its present financial position would be unable to pay its present depositors in full," the RBI said.

As of July 24, 2023, DICGC has already paid Rs 230.16 crore of the total insured deposits based on the willingness received from the concerned depositors of the bank.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)