The Reserve Bank of India (RBI) has cancelled the license of Jijamata Mahila Sahakari Bank, located in Satara, Maharashtra.
The decision was made due to the bank’s poor financial health, insufficient capital, and low earning potential.
The RBI noted that the bank’s financial condition had been worsening continuously, and allowing it to operate further would harm the public interest.
Reasons Behind the License Cancellation
The bank’s license had previously been revoked on June 30, 2016, but it was reinstated on October 23, 2019, after the bank appealed.
At that time, an audit of the bank’s financial year 2013-14 was ordered.
The RBI appointed a forensic auditor, but the bank’s lack of cooperation prevented the audit from being completed.
Consequently, the bank’s financial situation deteriorated further, leading to the cancellation of its license once again.
Impact on Customers and Depositors
With the license cancellation, the bank can no longer carry out any banking operations, including accepting deposits or repaying old deposits.
The bank will now go through a liquidation process, and the state’s Registrar of Cooperative Societies will appoint a liquidator to manage it.
Customers are protected under the Deposit Insurance and Credit Guarantee Corporation (DICGC) coverage, which insures up to ₹5 lakh per account holder.
About 94.41% of the bank’s deposits are covered by DICGC insurance, ensuring most depositors are protected.
The RBI’s action aims to maintain banking stability and prevent misuse of limited resources.
Customers affected by this decision are advised to quickly apply for deposit insurance claims to recover their funds.
