RBI cancels banking licence of Shivajirao Bhosale Sahakari bank

PUNE The Reserve Bank of India (RBI), on Monday, cancelled the banking licence of the Shivajirao Bhosale Sahakari Bank, claiming that the bank does not have adequate capital and earning prospects

PUNE The Reserve Bank of India (RBI), on Monday, cancelled the banking licence of the Shivajirao Bhosale Sahakari Bank, claiming that the bank does not have adequate capital and earning prospects.

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The RBI has, vide order dated May 28, 2021, stated: “Consequently, the bank ceases to carry on banking business, with effect from the close of business on May 31, 2021. The Registrar of Cooperative Societies, Maharashtra has also been requested to issue an order for winding up the bank and to appoint a liquidator for the bank.”

“Consequent to the cancellation of its licence, the Shivajirao Bhosale Sahakari Bank is prohibited from conducting any banking business, which includes acceptance of deposits and repayment of deposits, as defined in Section 5(b), read with Section 56 of the Banking Regulation Act, 1949, with immediate effect,” the RBI stated.

RBI chief general manager Yogesh Dayal said, “With cancellation of licence and commencement of liquidation proceedings, the process of paying the depositors of the Shivajirao Bhosale Sahakari Bank as per the DICGC Act, 1961 will be set in motion. As per the data submitted by the bank, 98% of the depositors will receive full amounts of their deposits from the Deposit Insurance and Credit Guarantee Corporation (DICGC). On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of ₹5,00,000/- (rupees five lakh only), from the DICGC, subject to the provisions of the DICGC Act, 1961.”

As many as 71,000 investors have invested a fixed deposit of ₹5 lakh, while 8,000 investors invested more than ₹5 lakh in the form of various deposits. In January 2020, the Pune Police registered a case against Maharashtra State Legislative Council (MLC) member and bank chairman Anil Bhosale, bank director Suryaji Jadhav, chief accountant Shailesh Bhosale and chief executive officer, Tanaji Padwal. A case has also been registered against Bhosale’s wife Reshma Bhosale, who is also an accused in the case.

The case was registered under sections 406, 408, 468, 471 and 34 of IPC and relevant sections of Maharashtra Protection of Interest of Depositors (MPID).