The Reserve Bank of India has cancelled the license of the bank due to financial inability and other regulatory lapses. An order has been issued to close the operations of the bank from today. The bank does not have sufficient capital and earning prospects.

The country’s central bank, the Reserve Bank of India, on Wednesday cancelled the license of The City Co-operative Bank, Maharashtra, due to lack of adequate capital and earning prospects. The Reserve Bank said that the Cooperative Commissioner of Maharashtra and the Registrar of Cooperative Societies have been asked to issue an order to close the bank and appoint a liquidator. According to the news of Bhasha, according to the Reserve Bank, the cooperative bank has closed the bank operation from the end of business hours on June 19, 2024.

87 percent of depositors are entitled to receive the full amount of deposits

According to the news, every depositor will be entitled to receive the deposit  insurance claim amount of his deposits up to the monetary limit of only Rs 5 lakh from the Deposit  Insurance and Credit Guarantee Corporation (DICGC).

The Reserve Bank said that according to the bank’s data, about 87 percent of the depositors are entitled to receive the full amount of their deposits from DICGC. DICGC has already paid Rs 230.99 crore out of the total insured deposits based on the wishes received from the respective depositors of the bank till June 14, 2024.

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Banned from doing banking business

The Reserve Bank said the Mumbai-based cooperative bank does not have adequate capital and earning prospects. It said that with its current financial position, the bank would be unable to pay its depositors in full. It said that if it is allowed to continue its banking activities further, it would adversely affect public interest. As a result of the cancellation of its license, City Co-operative Bank has been banned from carrying on the business of a bank, which, among other things, includes accepting deposits and repayment of deposits. Earlier, RBI had cancelled the license of another bank.