RBI cancels licence of CKP Cooperative Bank, depositors to get only Rs 5 lakh under insurance sccheme

The Reserve Bank of India on Saturday canceled the license of CKP Co-operative Bank, with operations mainly in Mumbai and Pune, prohibiting it from conducting the business of 'banking' which includes acceptance of deposits and repayment of deposits with immediate effect.

The RBI has initiated liquidation process against the bank. On liquidation, depositors are entitled to repayment of their deposits up to Rs 5 lakh only from the Deposit Insurance and Credit Guarantee Corporation (DICGC), the RBI said in a release.

The bank’s total deposit stood at Rs 485.56 crore as on November 2019 and its loan book stood at Rs 161 crore.

"The financial position of the bank is highly adverse and unsustainable. There is no concrete revival plan or proposal for merger with another bank. Credible commitment towards revival from the management is not visible," the RBI said.

The Registrar of Co-operative Societies, Pune, Maharashtra, has been asked to appoint a liquidator for the bank, it said.

"The bank is not in a position to pay its present and future depositors. The affairs of the bank were also conducted in a manner detrimental to the public interest and interest of the depositors,” it said.

The bank's efforts for revival have been far from adequate though it has been given ample time and opportunity and dispensations. No merger proposal has been received in respect of the bank. Thus, in all likelihood, public interest would be adversely affected if the bank were allowed to carry on its business any further," the RBI said.

Earlier in May 2014, the RBI had put curbs on CKP bank, restricting deposit withdrawal at Rs 1,000. Last year, Punjab nad Maharasthra Cooperative Bank too had come under withdrawal restrictions.