RBI has cancelled the licence of Karanala Nagari Cooperative Bank, Panvel in Maharashtra. RBI has taken this decision as it is not in a state of adequate capital with the cooperative bank and payment of the full amount of its existing depositors. RBI said the bank will not be able to do banking business after the business closes.

Announcing the cancellation of the bank's licence, the Reserve Bank said that as per the details submitted by the bank, 95 per cent of the depositors will get their entire deposit through deposit DICGC. In case of liquidation, every depositor has the right to claim insurance deposited from DICGC. The limit is up to Rs.5 lakhs. The Reserve Bank said that the licence of the Karanchala Nagari Sahakari Bank has been cancelled under the August 9 order.

The bank's licence has been cancelled as it does not have adequate capital and earning prospects. RBI said the Lender has failed to comply with the requirements of all sections of the Banking Regulation Act, 1949. It also informed that the bank will not be able to make full payments to its current depositors with its current financial position. Announcing the cancellation of licences, RBI said that if the bank is allowed to pursue its banking business, the common man will be adversely affected.

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