License of Lakshmi Sahakari Bank of Solapur cancelled

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Mumbai : Reserve Bank on Thursday passed an order revoking the business license of Lakshmi Cooperative Bank, which has a legacy of nine decades. The reason given for this is lack of sufficient capital and the bank’s financial condition is not sufficient to fully repay the depositors’ money.

Lakshmi Bank has its headquarters in Solapur and a total of five branches in surrounding talukas. After the cancellation of the license by the RBI, the bank will not be able to carry on any banking business till the end of business hours on Thursday. The bank’s license has been canceled by an order dated September 14, 2022, the RBI said in a press release on Thursday.

In the same order, the RBI has directed the State Cooperative Commissioner and Registrar of Cooperative Societies to issue winding up order and appoint an administrator for the bank.

Full compensation to 99 percent depositors

According to the data presented by the bank itself, 99 percent of the depositors of Lakshmi Co-operative Bank will be able to recover the entire deposit in their account. 193.68 crore has been allocated by the Deposit Insurance and Credit Guarantee Corporation (DICGC). According to the information on the bank’s website, the bank had deposits of Rs.360 crore. All types of bank deposits up to a maximum of five lakh rupees are covered by insurance.

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