The Reserve Bank of India has cancelled the licence of Alwar Urban Co-operative Bank Ltd., Alwar, Rajasthan to carry on banking business, with effect from the close of business on July 05, 2018.
The Registrar of Co-operative Societies, Rajasthan has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank.
The Reserve Bank cancelled the licence of the bank as the bank does not have adequate capital and earning prospects. The bank is not in a position to pay its present and future depositors in full as and when their claims accrue, said RBI in a press release quoting suitable sections of the Banking Regulation Act, 1949.
The affairs of the bank are being conducted in a manner detrimental to the interest of its present and future depositors and the present financial position of the bank leaves no scope for its revival, RBI felt.
Consequent to the cancellation of its licence, Alwar Urban Co-operative Bank Ltd., Alwar, Rajasthan is prohibited from conducting the business of ‘banking’ which includes acceptance of deposits and repayment of deposits.
With the cancellation of licence and commencement of liquidation proceedings, the process of paying the depositors of Alwar Urban Co-operative Bank Ltd., Alwar, Rajasthan as per the DICGC Act, 1961 will be set in motion.
On liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of ? 1,00,000/- (Rupees One lakh only) from the Deposit Insurance and Credit Guarantee Corporation (DICGC) as per usual terms and conditions, the release adds.
It will have adverse effect on entire cooperative banking sector.