Reserve Bank of India today suspended operations of CKP Co-operative Bank and cancelled its licence.
“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 in a statement.
The RBI said the bank is not in a position to pay its present or future depositors and is in violation of regulatory norms for minimum capital requirement.
“The affairs of the bank were and are being conducted in a manner detrimental to the public interest and interest of the depositors and that the general character of the management of the bank is prejudicial to the interest of depositors as also public interest,” RBI said.
“The bank’s efforts for revival have been far from adequate though the bank 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 central bank added.
With the cancellation of licence and commencement of liquidation proceedings, the process of paying the depositors of The CKP Co-operative Bank as per the DICGC Act, 1961 will be set in motion.
On liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling ofl Rs 5 lakh from the DICGC, the Reserve Bank said.