The Reserve Bank of India has cancelled the license of another cooperative bank. The RBI said on Tuesday that it has cancelled the license of Jijamata Mahila Sahakari Bank, Satara (Maharashtra).
The reason for this is that the cooperative bank does not have adequate capital and earning prospects. It may be noted that the banking license of this cooperative bank was earlier cancelled through an order dated June 30, 2016 and was reinstated on October 23, 2019 on the bank’s appeal.
What did the Reserve Bank say?
The Reserve Bank said in a statement that the appellate authority directed that a forensic audit of the bank be conducted for the financial year 2013-14 to assess its financial position. The central bank had appointed a forensic auditor, but the audit could not be completed due to the bank’s non-cooperation. While cancelling the license, the Reserve Bank said, “As per the assessment, the financial position of the bank has been continuously deteriorating. The bank has ceased to carry on banking business with effect from the close of business on October 7, 2025.” The Registrar of Cooperative Societies of Maharashtra has also been requested to close the bank and appoint a liquidator for the bank.
Customers can claim insurance on deposits
The Reserve Bank stated that consequent to the cancellation of the licence, Jijamata Mahila Sahakari Bank, Satara, Maharashtra, is prohibited from carrying on the business of ‘banking’ with immediate effect, which, inter alia, includes acceptance of deposits and repayment of deposits. Upon liquidation, each depositor will be entitled to receive a deposit insurance claim amount of up to Rs 5 lakh on his/her deposits from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
The Reserve Bank stated that as of September 30, 2024, 94.41 percent of total deposits were covered under DICGC insurance. The Reserve Bank stated that the cooperative bank lacked adequate capital and earning prospects, which led to the decision to cancel its license. The RBI stated that allowing the bank to continue its banking business would adversely affect the public interest.
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