RBI cancels licence of Rajasthan-based Sumerpur Mercantile Urban Cooperative Bank

New Delhi [India], February 28 (ANI): The Reserve Bank of India (RBI) has cancelled the licence of Sumerpur Mercantile Urban Cooperative Bank Limited, Sumerpur, in Rajasthan's Pali district. Consequently, the bank ceases to carry on banking business, with effect from the close of business today.
The Registrar of Cooperative Societies, Rajasthan has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank.
The Reserve Bank said it cancelled the licence of the bank as the 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; and public interest would be adversely affected if the bank is allowed to carry on its banking business any further.
Consequent to the cancellation of its licence, "Sumerpur Mercantile Urban Cooperative Bank Limited, Sumerpur, Pali, Rajasthan" 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 a monetary ceiling of Rs 500,000 from Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of DICGC Act, 1961.
As per the data submitted by the bank, 99.13 per cent of the depositors are entitled to receive full amount of their deposits from DICGC. As on November 30, 2023, DICGC has already paid Rs 45.22 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961 based on the willingness received from the concerned depositors of the bank. (ANI)