Reserve Bank of India (RBI) has cancelled the banking licence of Nashik Zilla Girna Sahakari Bank Limited as the lender does not have adequate capital and earning prospects.

The Nashik-based bank is prohibited from conducting the business of 'banking', which includes acceptance of deposits and repayment of deposits, with immediate effect, Reserve Bank of India said in a statement.

It also said the Commissioner and Registrar of Cooperative, Maharashtra has been requested to issue an order for winding up the bank and appoint a liquidator for the bank.

On liquidation, every depositor would be entitled to receive a deposit insurance claim amount of his/her deposits up to Rs 5 lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC).

"As per the data submitted by the bank, 99.92% of the depositors are entitled to receive the full amount of their deposits from DICGC," the RBI said.

DICGC has already paid Rs 16.27 crore of the total insured deposits based on the willingness received from the concerned depositors of the bank, PTI reported.

RBI said the cooperative bank does not have adequate capital and earning prospects, and it has failed to comply with the requirements of provisions of the Banking Regulation Act, 1949.

The continuance of the bank is prejudicial to the interests of its depositors, it added.

The bank with its present financial position would be unable to pay its present depositors in full, it said.

Public interest would be adversely affected if the bank is allowed to carry on its banking business any further, the RBI said while cancelling the licence.