RBI Revoke License of Seva Vikas Co-operative Bank; depositors will get up to Rs 5 lakh

The Reserve Bank of India today revoked the license of Pune-based The Seva Vikas Co-operative Bank Ltd, alleging that the bank lacks adequate capital and earnings prospects. RBI said the bank will cease its banking operations with effect from the closure of operations on October 10, 2022. “The Commissioner for Cooperation and Registrar of Cooperatives, Maharashtra has also been requested to issue an order for the dissolution of the bank and appoint a liquidator for the bank,” the RBI said in a statement.

The RBI noted that with its current financial position, Seva Vikas Co-operative Bank would not be able to pay its current depositors in full. The central bank said 99 percent of savers are eligible to get the full amount of their deposits back. “On liquidation, each depositor would be entitled to the claim amount of his/her deposits up to a monetary ceiling of Rs 5,000,000…..approximately 99% of the depositors are entitled to the full amount of their deposits. Deposits of DICGC” , the central bank said.

The reserve bank said that the Deposit Insurance and Credit Guarantee Corporation (DICGC) has already paid Rs 152.36 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961 on September 14, 2022.

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“As a result of the revocation of its license, ‘The Seva Vikas Co-operative Bank Ltd., Pune, Maharashtra’ is prohibited from engaging in ‘banking’, which includes, among other things, accepting deposits and refunding deposits as defined in section 5(b) read with section 56 of the Banking Regulation Act, 1949 with immediate effect,” according to the RBI.

The central bank also claimed that the bank has failed to comply with the provisions of Section 11(1) and Section 22(3)(d) read with Section 56 of the Banking Regulation Act, 1949. “The bank has not complied with the requirements of Sections 22(3)(a), 22(3)(b), 22(3)(c), 22(3)(d) and 22(3)(e) read with Section 56 of the Banking Regulation Act , 1949,” it read.

The RBI said the public interest would be harmed if the bank were allowed to continue its banking activities.

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