The Reserve Bank of India on Saturday said it cancelled the licence of Mumbai-based CKP Cooperative Bank, as the bank’s financial position is “highly adverse and unsustainable”. The central bank said that the affairs of the bank were being conducted in a manner detrimental to public interest. The order, passed on April 28, is effective from April 30.

“Consequent to the cancellation of its licence, the CKP Co-operative Bank Limited, Mumbai, is prohibited from conducting the business of ‘banking’ which includes acceptance of deposits and repayment of deposits...” the RBI said. The central bank asked the Registrar of Co-operative Societies, Pune, to issue an order for winding up the affairs of CKP Cooperative Bank. It also ordered the registrar to appoint a liquidator.

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The RBI said CKP Cooperative Bank is not in a position to pay its depositors. Instead, they will be paid according to the Deposit Insurance and Credit Guarantee Corporation Act, 1961. The Deposit Insurance and Credit Guarantee Corporation can grant each depositor up to Rs 5,00,000 as repayment, the RBI said.

“The bank’s efforts for revival have been far from adequate though the bank has been given ample time and opportunity and dispensations,” the RBI said. “No merger proposal has been received in respect of the bank. Thus, in all likelihood, public interest would be adversely affected if the bank were allowed to carry on its business any further.”

As of November 2019, the total deposits of the bank amounted to Rs 485.56 crore and its loan book has Rs 161.17 crore, Mint reported.

In March, RBI had imposed a moratorium on cash-strapped Yes Bank, and restricted withdrawals at Rs 50,000 for each account. The board of directors of the bank was also superseded with immediate effect. The RBI said Yes Bank lacked a credible revival plan, and therefore it had to act in the interest of the public and depositors.