The Reserve Bank of India today announced that it has canceled the license of Pune-based Rupee Cooperative Bank, ordering it to cease banking operations from September 22, 2022.
Underlining the reasons for the cancellation of the bank’s license, RBI said that Rupee Cooperative Bank does not have “adequate capital and earning prospects”. This comes a few months after the bank’s proposed merger with Saraswat Bank fell through even after receiving in-principle approval from RBI.
Saraswat Bank questioned the viability of the merger after Rupee Cooperative Bank repaid over 64,000 people their deposits, totaling ₹700 crore.
Interestingly, in its order, RBI outlined that the continuance of Rupee Cooperative Bank would be against the interests of depositors and the public, and that the bank would be unable to repay its existing depositors in full in its current financial position.