The Reserve Bank of India (RBI)announced the cancellation of the licence of Maharashtra-based Laxmi Co-operative Bank because of a shortage of capital. Every depositor would be entitled to receive a deposit insurance claim amount up to Rs 5 lakh during liquidation.

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According to the RBI, “the bank with its present financial position would be unable to pay its present depositors in the full and public interest would be adversely affected if the bank is allowed to carry on, the Reserve Bank cancelled the licence of the bank as the lender does not have adequate capital and earning prospects and the continuance of the bank is prejudicial to the interests of its depositors,” the RBI said in a statement.

Also, they asked the bank to wind up the operation, and the Maharashtra bank appointed the liquidator, the Commissioner for Cooperation and the Registrar of Cooperative Societies. Every depositor is entitled to receive the entire deposit amount from the Deposit Insurance and Credit Guarantee Corporation (DICGC). DICGC paid Rs 193.68 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961.