The Reserve Bank of India (RBI) has canceled the license of another co-operative bank. The name of this cooperative bank is- Banaras Mercantile Co-operative Bank, Varanasi. RBI has taken this decision keeping in mind the deteriorating financial condition of the bank. With this, this bank can no longer carry on banking business.
What did RBI say?
The RBI said that the co-operative bank did not have sufficient capital and earning potential and its continuation was not in the interest of its depositors. The Reserve Bank said – due to its current financial condition, the bank will be unable to repay its depositors in full. Apart from this, the Cooperative Commissioner of Uttar Pradesh and the Registrar of Cooperative Societies have also been requested to order closure of the bank and appointment of a liquidator.
What will happen to customers?
The central bank said that as per the data submitted by the bank, 99.98 percent of the depositors are entitled to get their full deposits from the Deposit Insurance and Credit Guarantee Corporation (DICGC). On liquidation, each depositor will receive from DICGC on their deposits Rs. A deposit of up to five lakhs will be entitled to get the insurance claim amount.
DICGC on the basis of the willingness received from the concerned depositors of the bank till April 30 under the provisions of DICGC Act out of the total insured deposits of Rs. 4.25 crore has been paid.