Canceled of bank license : On Wednesday, the Reserve Bank took a significant action against a bank, announcing the cancellation of the bank’s license. The RBI claims that the bank lacks sufficient capital and earnings potential. ‘Color Merchants Co-operative Bank’ is an Ahmedabad-based bank. The RBI has revoked the license of Color Merchants Co-operative Bank. The RBI stated, “The continuation of the bank will be damaging to depositors in the future. With its current financial situation, the bank will be unable to repay its current depositors in full.” In such a case, bank customers are concerned about what would happen to their deposited funds.
What will happen with the customers’ money after Canceled of bank license ?
According to a statement from the Reserve Bank of India (RBI), the Registrar of Cooperative Societies in Gujarat has also been asked to issue an order closing the bank and appointing a liquidator. According to the new rules, every depositor would only be able to collect a deposit insurance claim amount of up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation.
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According to data provided by the cooperative bank, about 98.51 percent of depositors are eligible to receive the full value of their deposits from DICGC. As of March 31, 2024, DICGC had already paid Rs 13.94 crore from the total insured deposits, based on the wishes of the bank’s depositors.
What did RBI say after Canceled of bank license
According to the RBI, the bank lacks appropriate capital and earning possibilities, which is why the license was cancelled. The cooperative bank has also failed to meet some requirements of the Banking Regulation Act. The RBI further stated that allowing the bank to continue conducting banking operations would be detrimental to the public interest. Following the termination of the license, the cooperative bank will cease banking operations on Wednesday (April 16, 2025). Accepting and repaying deposits are examples of banking company activities.
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