RBI cancels licence of Mumbai-based ‘The Kapol Co-operative Bank’

The RBI on Monday stated it has cancelled the licence of Mumbai-based The Kapol Co-operative Financial institution Restricted because the lender doesn’t have ample capital and incomes prospects. Consequent to the cancellation of the licence, the cooperative financial institution has been prohibited from conducting the enterprise of ‘banking’ which incorporates, amongst different issues, acceptance of deposits and reimbursement of deposits with rapid impact, the Reserve Financial institution stated in an announcement.

The Further Secretary & Central Registrar of Cooperative Societies, Ministry of Cooperation, has additionally been requested to problem an order for winding up the financial institution and appoint a liquidator for the financial institution, it stated.

On liquidation, the RBI stated each depositor could be entitled to obtain deposit insurance coverage declare quantity of his/her deposits as much as a financial ceiling of Rs 5 lakh from Deposit Insurance coverage and Credit score Assure Company (DICGC).

About 96.09 per cent of the depositors are entitled to obtain full quantity of their deposits from DICGC.

Giving particulars, the RBI stated the financial institution doesn’t have ample capital and incomes prospects and its continuance is prejudicial to the pursuits of its depositors.

“The financial institution with its current monetary place could be unable to pay its current depositors in full,” the RBI stated. As of July 24, 2023, DICGC has already paid Rs 230.16 crore of the full insured deposits based mostly on the willingness obtained from the involved depositors of the financial institution.