The Reserve Bank of India has cancelled the licence of Mantha Urban Cooperative Bank Ltd., Mantha, District: Jalna, Maharashtra. Consequently, the bank ceases to carry on banking business, with effect from the close of business on February 16, 2022.
The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra has 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 several provisions of Banking Regulation Act, 1949.
In a release RBI says “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.”
Consequent to the cancellation of its licence, Mantha Urban Cooperative Bank Ltd., Mantha, District: Jalna, Maharashtra is prohibited from conducting the business of ‘banking’ which includes acceptance of deposits and repayment of deposits as defined in the Act with immediate effect.
On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of ?5,00,000/- (Rupees Five lakh only) from Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of the DICGC Act, 1961.
As per the data submitted by the bank, more than 99% of the depositors are entitled to receive full amount of their deposits from DICGC. As on January 27, 2022, DICGC has sanctioned ?39.95 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.