RBI cancels the licence of Pune- based Seva Vikas Bank

The Reserve Bank of India (RBI) has cancelled the licence of Pune-based The Seva Vikas Co-operative Bank Ltd due to its earnings prospects and lack of capital.

The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra has also been requested to issue an order to close the operations of the bank and appoint a liquidator for the bank.

On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5,00,000 from Deposit Insurance and Credit Guarantee Corporation (DICGC). As per the data submitted by the bank, about 99 percent of the depositors are entitled to receive the full amount of their deposits from DICGC.

The Seva Vikas Co-operative Bank Ltd has been prohibited from conducting the business of banking which includes acceptance of deposits and repayment of deposits as defined in Section 5 (b) read with Section 56 of the Banking Regulation Act, 1949 with immediate effect.

The RBI said, “The continuance of the bank is prejudicial to the interests of its depositors; the bank with its present financial position would be unable to pay its present depositors in full; and the public interest would be adversely affected if the bank is allowed to carry on its banking business any further.”