The banking services license of Vasantdada Nagari Sahakari Bank Ltd., Osmanabad, has been canceled by the Reserve Bank of India to operate banks as the business closed on 11 of January. According to the RBI, the bank failed to stand on the required expectations and did not comply with the regulations.
Co-operative Commissioner and Registrar of Cooperative Societies (RCS), Maharashtra, has issued an order that the bank should be closed and a successor should be appointed. The RBI said the bank had failed to comply with the requirements, and the bank’s continued conduct undermined its depositors’ interests.
With its current financial position, the bank will not be able to pay its current depositors, and it is necessary for the public to block bank accounts that are designed in such a way that can exploit the interests of investors in the banking affairs, the RBI said.
After the cancellation of Vasantdada Nagari Sahakari Bank Ltd, Osmanabad, Maharashtra, its banking services were banned, which included acceptance and repayment of deposits as per the directions of Section 5(b) and Section 56 of the act from 1948 which was Banking Regulations Act.
With the cancellation of the license and the start of the termination process, the process of paying investors at Vasantdada Nagari Sahakari Bank Ltd., Osmanabad, Maharashtra, in terms of the DICGC Act, 1961 will come into effect, the RBI said.
On termination, every depositor is entitled to a deposit of up to Rs 5,00,000 in accordance with the terms and conditions and the amount will be provided by the Deposit Insurance and Credit Guarantee Corporation.
Regarding the depositors’ amount, above 99 percent of the depositors have been assured by the Reserve Bank of India of their funds with the bank at DICGC. The RBI has also canceled Mapusa Bank licenses, Karad Janata Sahakari Bank Ltd., and CKP Cooperative Bank. The regulator has also issued punitive actions on over a hundred cooperative banks.