The Reserve Bank of India on Friday cancelled the license of two banks due to lack of sufficient capital. RBI said in its statement that the license has been cancelled in view of the deteriorating financial condition.
The Reserve Bank of India is continuously tightening its grip on banks violating the rules. In this regard, RBI has taken a big action against two banks today and cancelled their license. On Friday, the central bank cancelled the license of Banaras Mercantile Cooperative Bank and Karnataka-based Shimsha Cooperative Bank.
Work in these banks stopped from today
The Reserve Bank of India said in a statement issued on Friday that the license of Cooperative Bank Niyamitha, Maddur Karnataka has been canceled in view of its deteriorating financial position, so the bank will stop banking business on Friday, July 5, 2024. It has also appealed to the Registrar of Co-operative Societies Karnataka to issue an order to close the bank and appoint a liquidator for the bank.
5 lakh rupees will be available on deposit claim
On liquidation, every depositor is entitled to claim up to Rs 5 lakh on deposit amount from Deposit Claim and Credit Guarantee Corporation. According to the data presented by the bank, RBI said that about 99.96 percent of the depositors are entitled to receive the full amount of their deposits from DICGC. Giving details, RBI further said that the bank does not have adequate capital and earning prospects and its continuation is detrimental to the interests of its depositors. In such a situation, the bank will be unable to make full payment to the depositors due to its current financial position.
11.85 crores already paid
Let us tell you that as of March 31, 2024, DICGC has already paid Rs 11.85 crore out of the total insured deposits based on the wishes received from the respective depositors of the bank.
It is known that earlier on June 17, the central bank had canceled the license of Ghazipur’s Purvanchal Cooperative Bank. The license of this bank was also canceled due to lack of sufficient capital and earning prospects. During this time, RBI had said that the cooperative bank would be unable to make full payment to its current depositors with its current financial position. If permission is given to carry forward the banking business, it will have a bad impact on the public.
