Another Co-Operative Bank Bites The Dust, RBI Cancels Licence Of Mumbai-based CKP Bank
The Reserve Bank has cancelled the licence of Mumbai-based The CKP Co-operative Bank Ltd citing its unsustainable financial position.The apex bank also noted that the CKP Co-operative Bank was not in a position to pay its depositors.?
According to the RBI order the CKP Co-operative Bank's licence has been cancelled from the close of business on April 30.?
"Consequent to the cancellation of its licence, The CKP Co-operative Bank Ltd, Mumbai, is prohibited from conducting the business of 'banking' which includes acceptance of deposits and repayment of deposits..." the RBI said.?
With the cancellation of licence and commencement of liquidation proceedings, the process of paying the depositors of the co-operative bank as per the 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 5,00,000 from the Deposit Insurance and Credit Guarantee Corporation (DICGC) as per usual terms and conditions," the RBI said.?
RBI said that 99.2 percent of The CKP Co-operative Bank's 1.32 lakh customers have accounts with funds less than Rs 5 lakh, and they will be eligible for full recovery under the DICGC scheme when the bank is liquidated.?
Giving details, the RBI said the financial position of the bank "is highly adverse and unsustainable".Also, there is no concrete revival plan or proposal for a merger with another bank.Besides, a credible commitment towards revival from the management is not visible, it added.?
"The bank is not in a position to pay its present and future depositors," it said.The RBI further said the affairs of the bank "were and are" being conducted in a manner detrimental to the public interest and interest of the depositors and that the general character of the management of the bank is prejudicial to the interest of depositors as also the public interest.?
The Dadar-based bank which has a history of 105 years and has six branches across Mumbai and Thane, and two extension counters had a loan book of Rs 158 crore and deposits of Rs 486 crore. It had a negative net worth of Rs 239 crore, according to the latest figures available.?
CKP Co-Operative is the third co-operative bank to face RBI action after PMC Bank in Mumbai and Sri Guru Raghavendra Sahakara Bank in Bengaluru.Unlike in the case of CKP, both PMC and Guru Raghavendra have only been placed under restrictions.? ? ? ??
