RBI Cancels Licence Of Shivam Sahakari Bank

On Friday, the RBI said the licence of Maharashtra's Shivam Sahakari Bank has been revoked as the bank does not have earning prospects besides adequate capital. "Consequently, the bank ceases to carry on banking business, with effect from the close of business on January 29, 2021," said the RBI in a statement.

RBI Cancels Licence Of Shivam Sahakari Bank

In accordance with the data submitted by the bank, over 99% depositors are fully covered under the Deposit Insurance and Credit Guarantee Corporation (DICGC).
"On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5,00,000 from the DICGC...," the central bank said.

The central bank added that the Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra has also been asked to issue an order for closing down the bank and appoint a liquidator for the purpose.

"The bank with its present financial position would be unable to pay its present depositors in full,"said the RBI. Moreover if the bank is allowed to continue its banking operations any more it would be against public interest.

Now as the licence of the bank has been revoked and liquidity proceedings shall commence the process of payment to the depositors of Shivam Sahakari Bank as per the DICGC Act, 1961 will begin.

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