The Reserve Bank of India (RBI) on Wednesday said it has cancelled the licence of Dr Shivajirao Patil Nilangekar Urban Co-operative Bank Ltd, Nilanga, Latur, as it does not have adequate capital and earning prospects.
Also, the Maharashtra-based bank with its current financial position would be unable to pay its depositors in full, the central bank said while announcing cancellation of its licence. The bank ceases to carry on banking business, with effect from the close of business on Wednesday.
Further, the Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra, has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank.
The RBI said Dr Shivajirao Patil Nilangekar Urban Co-operative Bank does not have adequate capital and earning prospects, and as such, it does not comply with the provisions of the Banking Regulation Act, 1949.
"The continuance of the bank is prejudicial to the interests of its depositors," it said adding that public interest would be adversely affected if the bank is allowed to carry on its banking business any further.
With cancellation of its licence, the bank has been prohibited from conducting the business of ''banking'' that includes acceptance of deposits and repayment of deposits with immediate effect.