RBI cancelled the license of one more urban cooperative bank i.e. Kolhapur based Shankarrao Pujari Nutan Nagarik Sahakari Bank on Monday. On Monday itself, the apex bank also imposed a monetary penalty on four urban cooperative banks worth Rs 7 lakh. These are Chembur Nagarik Sahakari Bank, Konark Urban Cooperative Bank, Laxmikrupa Urban Cooperative Bank and Jijamata Mahila Sahakari Bank.
In its press release, RBI said the licence of “Shankarrao Pujari Nutan Nagari Sahakari Bank Limited, Ichalkaranji, Kolhapur” has been cancelled. Consequently, the bank ceases to carry on banking business, with effect from the close of business on December 04, 2023.
The Commissioner for Cooperation and Registrar Cooperative Societies, Maharashtra 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. As such, it does not comply with the provisions of Section 11(1) and Section 22 (3) (d) read with Section 56 of the Banking Regulation Act, 1949.
“The continuance of the 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; and Public interest would be adversely affected if the bank is allowed to carry on its banking business any further”, RBI release reads.
According to the Reserve Bank of India, “As per the data submitted by the bank, 99.85% of the depositors are entitled to receive the full amount of their deposits from DICGC. As on July 24, 2023 DICGC has already paid Rs 41.60 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961 based on the willingness received from the concerned depositors of the bank”.
Consequent to the cancellation of its licence, “Shankarrao Pujari Nutan Nagari Sahakari Bank Limited, Ichalkaranji, Kolhapur” is prohibited from conducting the business of ‘banking’ which includes, among other things, acceptance of deposits and repayment of deposits as defined in Section 5(b) read with Section 56 of the Banking Regulation Act, 1949 with immediate effect.
Additionally, the Reserve Bank of India imposed a monetary penalty on four urban cooperative banks worth Rs 7 lakh on Monday. The Reserve Bank of India imposed a monetary penalty of Rs 1.00 lakh on the Chembur Nagarik Sahakari Bank Ltd., Mumbai for non-compliance with the directions issued by RBI on ‘Maintenance of Deposit Accounts – Primary (Urban) Co-operative Banks.
A monetary penalty of Rs 1.00 lakh has been imposed on the Konark Urban Cooperative Bank Ltd., Ulhasnagar for non-compliance with the directions issued by RBI on ‘Maintenance of Deposit Accounts – Primary (Urban) Co-operative Banks.
Besides, RBI has imposed a monetary penalty of Rs 1.00 lakh on Shri Laxmikrupa Urban Co-operative Bank Limited, Pune for non-compliance with RBI directions on ‘Reserve Bank of India – Know Your Customer (KYC) Direction, 2016’.
Similarly, the apex bank imposed a monetary penalty of Rs 4.00 lakh on Jijamata Mahila Sahakari Bank Limited, Pune for non-compliance with RBI directions on ‘Reserve Bank of India – Know Your Customer (KYC) Direction, 2016’ and ‘Frauds in UCBs: Changes in Monitoring and Reporting Mechanism’.