Bank license canceled: Ajanta Urban Co-operative Bank Limited, based in Aurangabad, Maharashtra, has had its license revoked by the Reserve Bank of India (RBI). This bank will close on April 22nd. So far in April, the RBI has issued orders to suspend banking operations at three banks. On Tuesday, the central bank announced its action. In addition, the Registrar of Co-operative Societies Maharashtra has been urged to issue orders for the bank’s dissolution and the appointment of a liquidator.
This action was taken in response to violations of different provisions of the Banking Regulation Act 1949. The RBI stated: “If banks are allowed to continue banking business, public interest will be adversely affected.”
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Why did the RBI take this action?
Ajanta Urban Co-operative Bank Limited has sufficient capital and no earnings potential. It also fails to meet the standards of Section 56, as well as 22(3)(b), 22(3)(d), and 22(3)(e) of the Banking Regulation Act of 1949. If permitted to continue, it could be damaging to depositors’ interests. Even in its current position, the bank cannot compensate its depositors.
Customers will also be impacted.
After the license is revoked, the bank will be unable to receive deposits. It also cannot pay back the deposits. Apart from that, loans and other banking operations will not be permitted. Customers will, however, be protected under the provisions of the DICGC Act of 1961. The Insurance and Credit Guarantee Corporation would pay them the deposit insurance claim amount of their savings up to a maximum of Rs 5 lakh.
More than 91% of consumers will receive the full amount.
According to the bank’s records, as of April 3, 2025, DICGC had paid Rs 275.22 crore to depositors affiliated with the bank from the total insured sums. At the same time, 91.55% of depositors are eligible to receive their full deposits.
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