The Reserve Bank of India (RBI) on Tuesday cancelled the licence of two cooperative banks — Sri Sharada Mahila Co-operative Bank, Tumkur, Karnataka, and Harihareshwar Sahakari Bank, Wai, Satara. While cancelling the licence, the RBI said cooperative banks do not have adequate capital and earning prospects. The banks with their present financial position would be unable to pay their present depositors in full, it added.

Harihareshwar Sahakari Bank ceases to carry on banking business, with effect from the close of business on July 11, 2023, the RBI said in a statement. About 99.96% of the depositors of Harihareshwar Sahakari Bank are entitled to receive the full amount of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC).

While Sri Sharada Mahila Co-operative Bank, about 97.82% of the depositors are entitled to receive the full amount of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC).

On liquidation, every depositor would be entitled to receive a deposit insurance claim amount of his/her deposits of up to Rs 5 lakh from DICGC.