The Reserve Bank of India (RBI) cancelled licence of Dr Shivajirao Patil Nilangekar Urban Co-operative Bank Ltd from Nilanga in Latur district of Maharashtra. RBI says, the lender does not have adequate capital and earning prospects.
Dr Shivajirao Patil Nilangekar Urban Co-operative Bank with its current financial position would be unable to pay its depositors in full, the banking regulator says while announcing cancellation of its licence. The bank ceases to carry on banking business, with effect from the close of business on 14 July 2021.
Further, RBI has requested the commissioner for cooperation and registrar of cooperative societies in Maharashtra, to issue an order for winding up the bank and appoint a liquidator.
The central bank says 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 says 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.