Jamkhed Merchants Co-operative Bank’s licence cancelled

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Jamkhed

Mumbai: The Reserve Bank of India (RBI) has cancelled the licence of Jamkhed Merchants Co-operative Bank Maryadit, Jamkhed of District Ahmednagar, Maharashtra. The order was made effective from the close of business on 1 June. The Registrar of Co-operative Societies, Maharashtra, has also been requested to issue an order for winding up of the bank and appoint a liquidator.

The Reserve Bank has cancelled the licence of the bank due to the following reasons as per the RBI.

  • The bank did not comply with the provisions of Sections 11(1) read with Section 56 of the Banking Regulation (BR) Act, 1949 (AACS).
  • Its operations were being carried out in a manner detrimental to the interest of the present and future depositors and that of the public and in violation of Section 22(3)(a), 22(3)(b), 22(3)(c), 22(3)(d), and 22(3)(e) of the Banking Regulation Act, 1949(AACS).
  • The bank was not in a position to pay its present and future depositors in full as and when their claims accrue.
  • The present financial position of the bank leaves no scope for its revival.
  • The public interest would be affected adversely if the bank was allowed to carry on the banking business, any further.

Consequent to the cancellation of its licence, Jamkhed Merchants Co-operative Bank Maryadit., Jamkhed, Dist Ahmednagar, Maharashtra is prohibited from conducting the business of ‘banking’ as defined in Section 5 (b) of the BR Act, 1949 (AACS), with immediate effect.

With the cancellation of license and commencement of liquidation proceedings, the process of paying the depositors of Jamkhed Merchants Co-operative Bank Maryadit., Jamkhed, Dist Ahmednagar, Maharashtra, as per the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, 1961 will be set in motion. On liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of Rs 1,00,000 (Rupees one lakh only) from the Deposit Insurance and Credit Guarantee Corporation (DICGC) as per usual terms and conditions.

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