The Reserve Bank of India (RBI) on Wednesday cancelled the license of Dr. Shivajirao Patil Nilangekar Urban Co-operative Bank Limited, Nilanga, Dist. Latur, Maharashtra. Consequently, the bank ceases to carry on banking business, with effect from the close of business on July 14, 2021. 

The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank. The Reserve Bank cancelled the license of the bank as:

• The bank does not have adequate capital and earning prospects. As such, it does not comply with the provisions of section 11(1) and section 22 (3) (d) read with section 56 of the Banking Regulation Act, 1949.
• The bank has failed to comply with the requirements of section 22(3) (a), 22 (3) (b), 22(3)(c), 22(3) (d) and 22(3)(e) read with section 56 of the Banking Regulation Act, 1949;
• The continuance of the bank is prejudicial to the interests of its depositors;
• The bank with its present financial position would be unable to pay its present depositors in full; and
• Public interest would be adversely affected if the bank is allowed to carry on its banking business any further.

Consequent to the cancellation of its license, Dr. Shivajirao Patil Nilangekar Urban Co-operative Bank Limited is prohibited from conducting the business of ‘banking’ which includes acceptance of deposits and repayment of deposits as defined in Section 5 (b) read with Section 56 of the Banking Regulation Act, 1949 with immediate effect, RBI said in its order.

Meanwhile, the central bank also barred Mastercard from adding new clients in India for non-compliance with local data storage norms from 22 July. Notwithstanding the lapse of considerable time and adequate opportunities being given, the entity has been found to be non-compliant with the directions on Storage of Payment System Data, the RBI said.

This order will not impact existing customers of Mastercard. Mastercard shall advise all card-issuing banks and non-banks to conform to these directions. The supervisory action has been taken in the exercise of powers vested in RBI under Section 17 of the Payment and Settlement Systems Act, 2007 (PSS Act), the RBI said.