RBI cancels Karnala Nagari Sahakari Bank's licence

Mumbai: The Reserve Bank has cancelled the licence of Karnala Nagari Sahakari Bank, Panvel in Maharashtra for not having adequate capital and being unable to pay its present depositors in full. The bank ceased to carry on banking business with effect from the close of business on Friday.

"As per the data submitted by the bank, 95 per cent of the depositors will receive full amounts of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC)," the central bank said while announcing cancellation of the bank's licence. 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 DICGC.

RBI said the licence of Karnala Nagari Sahakari Bank was cancelled through an order dated August 9, 2021.

The licence of the bank is cancelled as it does not have adequate capital and earning prospects, RBI said, adding that the lender has failed to comply with the requirements of various sections of the Banking Regulation Act, 1949. Also, "the bank with its present financial position would be unable to pay its present depositors in full", it said. While announcing cancellation of the licence, RBI said public interest would be affected if the bank is allowed to carry on its business any further.