RBI cancels licence of Satara-based Jijamata Mahila Sahakari Bank

Mumbai, Oct 7 (PTI) The Reserve Bank on Tuesday said it has cancelled the licence of Jijamata Mahila Sahakari Bank, Satara (Maharashtra) as the lender does not have adequate capital and earning prospects.

The banking licence of the lender was earlier cancelled vide an order dated June 30, 2016 and was restored on October 23, 2019 on an appeal made by the bank.

In a statement, the RBI said the Appellate Authority, which allowed the appeal, directed that a forensic audit of the bank be conducted for the FY 2013-14 to assess the financial position.

The central bank had appointed a forensic auditor, but the audit could not be completed due to the non-cooperation of the bank, it said.

"Meanwhile, the financial position of the bank continued to deteriorate as assessed by RBI," it said while cancelling the licence.

The bank ceases to carry on banking business with effect from the close of business on October 7, 2025.

The Registrar of Cooperative Societies, Maharashtra has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank.

"Consequent to the cancellation of its licence, Jijamata Mahila Sahakari Bank, Satara, Maharashtra is prohibited from conducting the business of ‘banking’ which includes, among other things, acceptance of deposits and repayment of deposits...with immediate effect," the RBI said.

On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to Rs 5 lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC).

As on September 30, 2024, 94.41 per cent of the total deposits were covered under DICGC insurance, the RBI said.

Giving reasons for cancellation, the RBI said the cooperative bank does not have adequate capital and earning prospects.

"The bank with its present financial position would be unable to pay its present depositors in full," it said.

RBI added that public interest would be adversely affected if the bank is allowed to carry on its banking business any further. PTI NKD NKD ANU ANU