RBI Cancels Licence of Sumerpur Mercantile Urban Coop Bank

Mumbai, Feb 28 (PTI) The Reserve Bank of India (RBI) on Wednesday said it has cancelled the licence of Sumerpur Mercantile Urban Cooperative Bank, Pali (Rajasthan), as the lender does not have adequate capital and earning prospects.

The Registrar of Cooperative Societies, Rajasthan, has also been requested to issue an order for winding up the bank and appoint a liquidator, the RBI said in a statement.

On liquidation, every depositor will be entitled to receive deposit insurance claim amount of his/her deposits up to Rs 5 lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC).

"As per the data submitted by the bank, 99.13 per cent of the depositors are entitled to receive full amount of their deposits from DICGC," the RBI said.

As on November 30, 2023, DICGC has already paid Rs 45.22 crore of the total insured deposits based on the willingness received from the depositors concerned of the bank.

Giving reasons for cancellation of the licence, RBI said Sumerpur Mercantile Urban Cooperative Bank does not have adequate capital and earning prospects.

"The bank with its present financial position would be unable to pay its present depositors in full," it said, adding the continuance of the bank is prejudicial to the interests of its depositors.

Consequent to the cancellation of its licence, Sumerpur Mercantile Urban Cooperative Bank has been prohibited from conducting the business of 'banking', which includes, among other things, acceptance of deposits and repayment of deposits with immediate effect.