The Reserve Bank of India (RBI) has cancelled the banking licence of Shankarrao Mohite Patil Sahakari Bank Ltd., Akluj in Kolhapur district of Maharashtra with effect from the close of business on April 11, 2025.
The decision was conveyed through an order dated April 9, 2025. Following this, the bank is prohibited from conducting any banking operations, including accepting and repaying deposits.
As of March 31, 2025, the Deposit Insurance and Credit Guarantee Corporation (DICGC) has already disbursed Rs 47.89 crore to eligible depositors under the provisions of Section 18A of the DICGC Act, 1961, based on claims and willingness submitted by the concerned depositors.
In addition, the Registrar of Cooperative Societies, Maharashtra has been requested by the RBI to issue an order for the winding up of the bank and to appoint a liquidator to oversee the process.
According to the RBI, the licence was cancelled due to multiple regulatory concerns. The bank lacks adequate capital and earning prospects, thereby violating Section 11(1) and Section 22(3)(d) read with Section 56 of the Banking Regulation Act, 1949.
It also failed to comply with various provisions under Sections 22(3)(a) to 22(3)(e). The continued operation of the bank was found to be prejudicial to the interests of depositors.
Furthermore, the bank is unable to pay its depositors in full based on its current financial position. The RBI stated that allowing the bank to continue operations would adversely affect public interest.
Upon liquidation, depositors will be entitled to claim insurance for their deposits up to Rs 5 lakh, in accordance with DICGC guidelines and subject to the provisions of the DICGC Act, 1961. The RBI has assured that eligible depositors will receive their insured amounts without any disruption.
This decisive action by the RBI reinforces its commitment to safeguard depositor interests and ensure stability in the cooperative banking sector.
