Case Brief
RBI cancelled the banking licence of The Karad Janata Sahakari Bank Ltd., Karad, Maharashtra, by order dated December 7, 2020, effective from the close of business on that date. The cancellation was based on RBI’s finding that the bank lacked adequate capital and earning prospects and failed to comply with multiple provisions of the Banking Regulation Act, 1949, including sections 11(1) and 22(3)(a) to (e) read with section 56. RBI also noted that the bank’s continuance would be prejudicial to depositors, that it could not repay its depositors in full with its present financial position, and that public interest would be adversely affected. The bank had been under All-Inclusive Directions since November 7, 2017, and RBI requested the Maharashtra authorities to wind up the bank and appoint a liquidator. Liquidation proceedings would trigger DICGC-backed repayment to depositors, subject to the statutory ceiling.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location