Licence of Laxmi Co-operative Bank cancelled by RBI: Depositors can claim up to Rs 5 lakh

Licence of the Maharashtra based The Laxmi Co-operative Bank citing lack of adequate capital. Upon liquidation every depositor is entitled to receive a deposit insurance claim amount of upto Rs 5 lakh

New Delhi, Sep 23: The licence of the Maharashtra based The Laxmi Co-operative Bank has been cancelled citing lack of adequate capital. Upon liquidation every depositor is entitled to receive a deposit insurance claim amount of upto Rs 5 lakh.

The RBI said that bank in its present financial situation will not be able to pay its present depositors in full and public interest would be adversely affected if the Maharashtra based bank is allowed to carry on.

"The Reserve Bank cancelled the licence of the bank as the lender does not have adequate capital and earning prospects and the continuance of the bank is prejudicial to the interests of its depositors," a statement by the RBI read.

"On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5 lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of DICGC Act, 1961,"the central bank also said.

The Commissioner for Cooperation and Registrar of Cooperative Societies Maharashtra has also been asked to issue an order to wind up operations of the bank and appoint a liquidator for the bank.

99 per cent of the depositors are entitled to receive the full amount of their deposits. As of September 13 the Co-operative bank has already paid Rs 193 crore of the total insured deposits based on the willingness received from the depositors of the bank, the RBI also said.