The Reserve Bank of India has cancelled the licence of Vitthal Nagari Sahakari Bank based in Latur in Maharashtra. The order was made effective from the close of business on June 26, 2015.
The Registrar of Co-operative Societies, Maharashtra, has also been requested to issue an order for winding up of the bank and appoint a liquidator.
The Reserve Bank cancelled the licence of the bank as the financial position was precarious and there was no scope for its revival. The bank is not in a position to pay its present and future depositors in full, as and when their claims accrue, read a RBI press release.
The affairs of the bank were being conducted in a manner detrimental to the interest of its present and future depositors. In all likelihood public interest would be adversely affected if the bank was allowed to carry on its banking business any further.
With the cancellation of licence and commencement of liquidation proceedings, the process of paying the depositors as per the DICGC Act will be set in motion. Every depositor is entitled to repayment of his or her deposits only up to a monetary ceiling of Rupees one lakh.
