Mumbai, May 2: The Reserve Bank of India (RBI), in a statement released to the media on Saturday, informed that the license of The CKP Co-Operative Bank has been terminated. The bank was derecognised via an order issued on April 28, the RBI said, adding that the decision was based on the "unsustainable and highly adverse" financial position of the Mumbai-based lender. AAP Hits Out at Modi Govt Claiming RBI Has Cancelled Licence of The CKP Co-Operative Bank in Mumbai.

The RBI action is feared to affect scores of people amid the ongoing lockdown. The bank had 1.25 lakh account holders, along with 11,000 depositor-investors. Its net worth was stated to be Rs 230 crore, whereas, a cumulative amount of Rs 485 crore was collected in the form of fixed deposits (FD).

The license termination of the lender was mandated under the Banking Regulation Act, 1949, said the Reserve Bank. "The bank is not satisfying the requirement of minimum capital and reserves as prescribed in Section 11 (1)," the RBI said, adding that the CKP Bank also failed to maintain the stipulated minimum regulatory capital requirement of 9 percent.

Statement Issued by RBI

Account Holders Entitled For Repayment Upto Rs 5 Lakh

The RBI has assured the bank's account holders that the liquidation process is initiated and would lead to settlement of outstanding dues. The upper limit for the repayment to account holders has been fixed as Rs 5 lakh.

"With the cancellation of licence and commencement of liquidation proceedings, the process of paying the depositors of The CKP Co-operative Bank Ltd., Mumbai, as per the DICGC Act, 1961 will be set in motion. On liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of ₹ 5,00,000/- from the Deposit Insurance and Credit Guarantee Corporation (DICGC) as per usual terms and conditions," the statement read.

(The above story first appeared on LatestLY on May 02, 2020 09:16 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).