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Canceled the license of this bank in Maharashtra! Depositors will get a maximum refund of Tk 5 lakh NewsPipa

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The Reserve Bank of India has canceled the license of Lakshmi Asahari Bank Limited in Solapur, Maharashtra, due to which depositors will get a refund of a maximum of Rs 5 lakh.

File photo of Reserve Bank of India
File photo of Reserve Bank of India
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MUMBAI: The Reserve Bank of India has revoked the license of Lakshmi Asahi Bank Ltd in Solapur, Maharashtra, which will result in refunds of up to Rs 5 lakh to depositors.

In a statement issued today, the Reserve Bank said that the license of the bank itself was canceled on September 14 and the bank’s operations have been banned from today. The Registrar of Co-operative Societies in Maharashtra has been asked to issue an order to wind up the bank and initiate its liquidation process.

The bank is undercapitalized and has no blueprint for revenue generation. In such a situation the bank is unable to comply with the provisions of Section 56 of the Banking Regulation Act, 1949. In view of this, the license has been cancelled. Such banks do not act in the interests of depositors. The current financial condition of the bank is not in a position to return the full amount to the depositors.

A maximum of five lakh rupees will be paid to each depositor under deposit insurance claim from Deposit Insurance and Credit Guarantee Corporation in case of settlement process. According to the information provided by the bank, 99% of the depositors will get the full deposit amount. As of September 13, the corporation has settled claims of Rs 193.68 crore.

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