Nashik, Oct 5: The Reserve Bank of India (RBI) has cancelled the licence of Nagar Urban Co-operative Bank Ltd. for not complying with various provisions of the Banking Regulation Act and defaulting on depositors’ payments.
The RBI order on Wednesday said the continuance of the bank would be against public interests and prejudicial to the interests of the depositors.
The bank, headquartered in Ahmednagar district of Maharashtra, did not have adequate capital and earning prospects, the RBI order said.
“Consequently, the bank ceases to carry on banking business, with effect from the close of business on October 04, Thursday,” the RBI said.
The banking regulator said the Additional Secretary & Central Registrar of Cooperative Societies of the Union Ministry of Cooperation has been requested to issue an order for winding up the bank and appoint a liquidator
The RBI said consequent to the cancellation of its licence, the bank is prohibited from conducting the business of ‘banking’ which includes, among other things, “acceptance of deposits and repayment of deposits.
On liquidation of the bank,, every depositor would be entitled to receive deposit insurance claim amount of deposits up to a monetary ceiling of Rs 5,00,000 from Deposit Insurance and Credit Guarantee Corporation (DICGC).
The closure of the 113-year-old bank has caused a stir in the city as the bank has supported the lives of many common people.
Earlier the bank had 47 branches. Of these, eleven branches with unsatisfactory performance were closed during the administration and now there are 36 branches.
About 1600 of the defaulters of the bank have a principal of about Rs 450 crores with the interest amounting to about Rs 827 crores.
