The RBI has taken action to cancel the license of another cooperative bank, this time targeting Banaras Mercantile Bank in Varanasi. The central bank cited inadequate capital as the reason for its decision.
The Reserve Bank of India (RBI) has revoked the license of Banaras Mercantile Cooperative Bank in Varanasi due to its deteriorating financial condition. RBI, while canceling the license, stated, “As a result, the bank will cease to carry on banking business from July 4, 2024.”
The Cooperative Commissioner and the Registrar of Cooperative Societies in Uttar Pradesh have been asked to issue an order for the bank’s closure and appointment of a liquidator. The Reserve Bank of India has indicated that, based on the bank’s reported figures, it is entitled to receive the full deposit amount from the Deposit Insurance and Credit Guarantee Corporation (DICGC), totaling 99.98 percent.
The Reserve Bank said, “Due to its current financial position the bank will be unable to make full payment to its depositors.” DICGC has already paid Rs 4.25 crore out of the total insured deposits under the provisions of the DICGC Act on the basis of wishes received from the concerned depositors of the bank till April 30.
