The Central Bank took strict action against Banaras Merchantile Co-operative Bank Ltd Varanasi. Seeing the deteriorating financial condition of this bank, the license of the bank was cancelled and its operations were closed.
Now the Central Bank took strict action against Banaras Merchantile Co-operative Bank Ltd Varanasi. Seeing the deteriorating financial condition of this bank, the license of the bank was cancelled and its operations were closed.
All the work of this bank has stopped
RBI has ordered the Cooperative Commissioner of Uttar Pradesh and the Registrar of Cooperative Societies to close the operations of Banaras Mercantile Cooperative Bank, Varanasi. For which it has been asked to issue an order to appoint a liquidator.
What will happen to the deposits of the customers?
According to the information given by the bank, under the Deposit Insurance and Loan Guarantee Rules, 99.98 percent of the depositors will be entitled to get their entire amount deposited in the bank. RBI also said that the bank neither has sufficient capital for its operations nor does it have any possibility of earning in the future.
The continuation of the bank is not right for the stakeholders. Looking at the current situation of the bank, RBI estimated that due to the current situation of the bank, it would not be able to make payments to all the depositors.
In December, under Section 35A of the Banking Regulation Act 1949, RBI banned Banaras Mercantile Bank from giving advances and loans to anyone without the permission of RBI. DICGC, working under RBI, has been formed to keep the money of depositors safe.
If any bank fails to pay the depositors, then the depositors are insured to get Rs 5 lakh from DICGC. The deposit amount of Rs 5 lakh is for every bank account and not for an individual.
