RBI cancels licence of Satara-based Jijamata Mahila Sahakari Bank

The Reserve Bank of India (RBI) on Tuesday said it has cancelled the licence of Jijamata Mahila Sahakari Bank Ltd., Satara in Maharashtra, citing deterioration in its financial position and failure to comply with regulatory requirements.

The central bank said the licence was cancelled as the bank did not have adequate capital and earning prospects and had failed to comply with provisions of the Banking Regulation Act, 1949.

The cooperative bank had earlier faced cancellation of its licence on June 30, 2016, but it was restored on October 23, 2019, following an appeal. The Appellate Authority had then directed that a forensic audit be conducted for the financial year 2013–14 to assess the bank’s financial position.

“RBI appointed a forensic auditor, but the audit could not be completed due to the non-cooperation of the bank. Meanwhile, the financial position of the bank continued to deteriorate,” the central bank said.

The RBI stated that the continuance of the bank was “prejudicial to the interests of depositors” and that it would be unable to pay them in full.

The bank has ceased to carry on banking business, including acceptance and repayment of deposits. The Registrar of Cooperative Societies, Maharashtra, has been requested to issue an order for winding up the bank and to appoint a liquidator.

Upon liquidation, each depositor would be entitled to receive deposit insurance of up to ₹5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC), subject to the provisions of the DICGC Act, 1961.

“As on September 30, 2024, 94.41% of the total deposits were covered under DICGC insurance,” the RBI said.