Reserve Bank of India: The Reserve Bank has decided to cancel the bank’s license due to its lack of sufficient capital and prospects. The bank’s banking license was previously revoked on June 30, 2016.
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Reserve Bank of India: The Reserve Bank of India has taken a major decision regarding a cooperative bank. The Reserve Bank announced on Tuesday that the license of Jijamata Mahila Sahakari Bank in Satara, Maharashtra, has been revoked. The reason for this is that the cooperative bank lacks sufficient capital and prospects.
Difficult Forensic Audit
The banking license of Jijamata Mahila Sahakari Bank was initially revoked by an order dated June 30, 2016. It was then reinstated on October 23, 2019, following the bank’s appeal. In a statement, the RBI said that the appellate authority directed that a forensic audit be conducted for the financial year 2013-14 to assess the bank’s financial position. The Reserve Bank had selected an auditor for this purpose, but due to lack of adequate cooperation from the bank, the audit could not be completed.
When will the closure begin?
Cancelling the license, the Reserve Bank stated that, based on assessments made in the meantime, the bank’s financial position was deteriorating. With this RBI decision, the bank has ceased its banking operations with effect from October 7, 2025. The Registrar of Cooperative Societies of Maharashtra has been requested to issue a closure order and appoint a liquidator for the bank.
A liquidator is a person or institution appointed during the winding-up process to sell off a company’s assets to pay off its creditors and distribute the remaining proceeds to shareholders. The liquidator manages the company’s assets.
This facility will be provided to customers
The Reserve Bank has stated that, after the closure of banking operations, among other things, accepting deposits and repaying deposits will be prohibited. However, after liquidation, each depositor can claim insurance up to Rs 5 lakh on their deposits from the Deposit Insurance and Credit Guarantee Corporation (DICGC). The RBI said that as of September 30, 2024, 94.41 percent of total deposits were covered under DICGC insurance.
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