Licence cancelled! But over 99 pct depositors of this bank will get full payment, confirms RBI

As per the bank's website, it had deposits of Rs 485.56 crore, loans of Rs 161.17 crore and a negative networth of Rs 239.18 crore.

Latest development on CKP Co-Operative Bank. Reuters photo.

In the latest development of CKP Co-Operative Bank matter, the Reserve Bank of India (RBI) has confirmed that over 99 per cent of CKP Co-Op Bank's 1.32 lakh depositors will get full money through Deposit Insurance and Credit Guarantee Corporation (DICGC). The clarification will help assuage concerns over the fate of the depositors following the cancellation of the city-based bank's license on Saturday.

"Out of 1,32,170 depositors of the bank, about 99.2 per cent will get full payment of their deposits from DICGC," RBI's chief general manager in the Department of Communication, Yogesh Dayal, tweeted. He said the bank had been under all inclusive directions that had restricted its activities since 2014 itself, and the decision to cancel the license was taken as there was no scope for its revival.

As per the bank's website, it had deposits of Rs 485.56 crore, loans of Rs 161.17 crore and a negative networth of Rs 239.18 crore.

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The RBI action on the bank had come over seven months after it placed the city-based Punjab and Maharashtra Co-operative Bank under directions in September last year due to financial mismanagement by officials. PMC was one of the largest banks in the space, and the directions, which include capping of deposit withdrawals, had led to protests by the depositors.

It can be noted that a slew of changes in regulations, including giving the RBI a greater say in the oversight of such cooperative sector lenders and also a hike in deposit insurance cover to Rs 5 lakh from Rs 1 lakh, have been introduced following the PMC episode.

In its order cancelling the license of CKP Bank, the RBI said the cooperative bank is not satisfying the stipulated minimum regulatory capital requirement of 9 per cent and the financial position of the bank "is highly adverse and unsustainable".

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