The Reserve Bank of India (RBI) today canceled the license of Maharashtra’s Laxmi Sahakari Bank Ltd, saying the Solapur-based lender does not have adequate capital and earning potential and does not comply with norms.
The order will be effective from today itself.
RBI in its press release said, “The Lakshmi Co-operative Bank Ltd., Solapur, Maharashtra is prohibited from carrying on the business of ‘Banking’ which includes, inter alia, 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”.
RBI also requested the Commissioner of Co-operatives and Registrar of Co-operative Societies, Maharashtra to issue an order to close the bank and appoint a liquidator for the bank.
It also said that on liquidation, every depositor shall be entitled to receive deposit insurance claim amount from the Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of the DICGC Act, up to a monetary limit of Rs 5 lakh. 1961.