Fear and panic gripped customers of CKP Co-operative Bank in Mumbai after the Reserve Bank of India (RBI) canceled the bank’s license over bad financial health and growing debt. Reports inform that the Central Bank revoked the bank’s license on Thursday night, sending shock-waves to its customers. According to a report by Moneycontrol, the bank is not in a position to pay its depositors in full as and when their claims accrue along with a several other reasons. Owing to the current crisis, over 11,000 depositors-investors and close to 1.25 lakh account holders will have to brace for trouble.
The current financial position of the bank leaves no scope for its revival, several media reports said. The Moneycontrol report further informs that the bank’s FD of Rs 485 crores is also in debt. The RBI had earlier put several restrictions on the functioning and services of the CKP Bank. The restrictions have been in place on withdrawal of deposits since 2014. Reports inform that the transactions of the bank were banned due to the increase in the its losses and decline in the Bank’s net worth. However, the bank tried to cope up and had a net worth of Rs 230 crore rupees this year as compared to Rs 146 crore in 2016. Despite operating profits, the license of the bank has been canceled due to declining net worth.
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