RBI cancels CKP Co-operative Bank’s licence; ‘depositors entitled to repayment of 5 lakh only’

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Updated: May 02, 2020 11:26 PM

The RBI, in a press release, said 'financial position of the bank is highly adverse and unsustainable'.

CKP Co-operative Bank, RBIRBI has cancelled the license of CKP Co-operative Bank. (File Photo)

CKP Co-operative Bank News: The Reserve Bank of India (RBI) on Saturday cancelled the license of Mumbai-based CKP Co-operative Bank. The RBI, in a press release, said ‘financial position of the bank is highly adverse and unsustainable’. It further added that the depositors are entitled to repayment of their deposits up to Rs 5 lakh only.

“The financial position of the bank is highly adverse and unsustainable. There is no concrete revival plan or proposal for merger with another bank. Credible commitment towards revival from the management is not visible,” the apex bank said in a statement.

“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,” RBI’s statement added.

The central bank’s move means that the troubled co-operative bank will be prohibited from carrying out any banking business, including accepting deposits etc.

According to reports, the co-operative bank has 1.25 lakh account holders. The CKP Co-operative Bank Ltd’s net worth is stated to be Rs 230 crore.

Meanwhile, the Maharashtra unit of Aam Aadmi Party (AAP) questioned the Centre over the action against CKP Co-operative Bank Ltd.

“In 2014 restrictions were placed on CKP Bank, just like they were placed on PMC Bank last year. Now, stealthily CKP bank has been shut, with the no mercy shown on the depositors which are largely middle class people with small savings,” the AAP Maharashtra unit said in a series of tweets.

“On the other hand, a private bank like YES Bank, where the scam is there for all to see got a bail out from the same government within a month simply because it has rich corporate customers,” it added.

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