The Reserve Bank of India (RBI) on Saturday cancelled the licence of Mumbai-based CKP Co-operative Bank, saying the lender’s financial position was highly adverse and unsustainable.
The banking regulator has asked the Maharashtra government to start the process of winding up operations and appoint a liquidator.
On liquidation, every depositor of the bank is entitled to get up to Rs 5 lakh only from the Deposit Insurance and Credit Guarantee Corporation, in line with the guidelines.
The licence has been cancelled with effect from the close of business on April 30, 2020.
The RBI in a statement said there was no concrete revival plan or proposal for merger with another bank and that credible commitment towards revival from the management was not visible.
The bank failed to meet the regulatory requirement of maintaining a minimum capital adequacy ratio of 9 per cent and reserves. The RBI said the lender was not in a position to pay its present and future depositors.
The affairs of the bank were being conducted in a manner detrimental to public interest and the interests of depositors, the RBI statement said.