The Reserve Bank of India on Monday said it has cancelled the licence of Vasantdada Nagari Sahakari Bank, Osmanabad, Maharashtra as the bank would be unable to pay its present depositors in full in its current financial position.
With the cancellation of licence and commencement of liquidation proceedings, the process of paying the depositors of Vasantdada Nagari Sahakari Bank will be set in motion.
On liquidation, every depositor is entitled to repayment of their deposits up to a monetary ceiling of Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation, the RBI said.
"More than 99% of the depositors of the bank will get full repayment of their deposits from DICGC," it said.
The licence stands cancelled from the close of business on Monday and the bank cannot carry on banking business.
Giving details, it said continuance of Vasantdada Nagari Sahakari Bank 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.
The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra has also been requested to issue an order for winding up the bank and appointing a liquidator for the bank, it added.
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