According to RBI, the cooperative bank cannot accept or repay deposits, with immediate effect. Moreover, with the cancellation of licence and start of liquidation proceedings, the process of paying the depositors will be as per the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, 1961.

“On liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of ₹5,00,000 from the DICGC as per usual terms and conditions," the central bank said.

The bank’s total deposits stood at ₹485.56 crore as on November 2019 and its loan book stood at ₹161.17 crore in the same period.

The affairs of the bank, RBI said, were and are being conducted in a manner detrimental to the public interest and interest of the depositors and that the general character of the management of the bank is prejudicial to the interest of depositors as also public interest.

RBI said that through its order on 28 April, it has cancelled the licence of the cooperative bank to carry on banking business, with effect from the close of business on 30 April. “The Registrar of Co-operative Societies, Pune, Maharashtra, has also been requested to issue an order for winding up the affairs of The CKP Co-operative Bank Ltd., Mumbai and appoint a liquidator for the bank," RBI said.

The central bank also outlined six reasons for its action. The financial position of the bank, RBI said, is highly adverse and unsustainable and there is no concrete revival plan or proposal for merger with another bank.

Secondly, the bank does not satisfy the requirement of minimum capital and reserves. It is also not in a position to pay its present and future depositors.

“The bank’s efforts for revival have been far from adequate though the bank has been given ample time and opportunity and dispensations. 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," RBI said.

In May 2014, RBI had put curbs on The CKP Co-operative Bank under Section 35A of the Banking Regulation Act, capping deposit withdrawals at ₹1,000. In September last year, similar actions were taken in the case of Punjab and Maharashtra Co-operative (PMC) Bank.