Jai Prakash Narayan Nagari Sahakari Bank's Licence Cancelled by RBI
Moneylife Digital Team 07 February 2024
The Reserve Bank of India (RBI) has cancelled the registration certificate of Maharashtra-based Jai Prakash Narayan Nagari Sahakari Bank Ltd, due to the lender's inadequate capital and poor earnings prospects. RBI has asked the Bank to stop banking business from 6 February 2024.
RBI says that the Basmathnagar, Hingoli district-based Bank does not have adequate capital and earning prospects and has failed to comply with the requirements of the Banking Regulation Act.
"The continuance of Jai Prakash Narayan Nagari Sahakari Bank is prejudicial to the interests of its depositors. With its present financial position, it would be unable to pay its present depositors in full. The public interest would be adversely affected if the Bank is allowed to carry on its banking business any further," RBI says.
Consequent to the cancellation of its licence, Jai Prakash Narayan Nagari Sahakari Bank is prohibited from conducting business, including accepting fresh deposits and repaying deposits.
According to RBI, on liquidation, every depositor of the Bank would be entitled to receive a deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs5 lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC).
As per the data submitted by Jai Prakash Narayan Nagari Sahakari Bank, 99.78% of the depositors are entitled to receive the full amount of their deposits from DICGC. As of 21 September 2023, DICGC has already paid Rs23.89 crore of the total insured deposits based on the willingness from the concerned depositors of the Maharashtra-based bank.
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