Bank Licence Cancels: RBI canceled license of this bank, transactions stopped for customers

 

RBI Cancels Bank Licence: RBI said, ‘According to the data presented by the bank, 95.8 percent of the depositors are entitled to receive the full amount of their deposits from DICGC.’

Durga Co-Operative Urban Bank: The Reserve Bank of India (RBI) has canceled the license of Vijayawada-based ‘The Durga Co-operative Urban Bank’. RBI has canceled the license of the bank for not having sufficient capital and earning prospects. The Reserve Bank said that the bank will stop banking business from the close of business on November 12, 2024. Also, the Cooperative Commissioner of Andhra Pradesh and the Registrar of Cooperative Societies have been requested to issue an order to close the bank and appoint a liquidator.

95.8 percent of depositors will get their money

On liquidation, every depositor will be entitled to receive deposit insurance claim amount on deposits up to a limit of Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC). RBI said, ‘According to the data presented by the bank, 95.8 percent of the depositors are entitled to receive the full amount of their deposits from DICGC.’ DICGC has paid Rs 9.84 crore out of the total insured deposits till August 31, 2024.

Durga Sahakari Urban Bank was closed for this reason

Regarding the cancellation of the license of Durga Sahakari Urban Bank, RBI said that the bank does not have sufficient capital and earning prospects. It has not been able to follow the rules of the Banking Regulation Act, 1949. It said, ‘The continuation of the bank is not good for the interests of its account holders. Due to its current financial position, the bank will be unable to make full payment to its existing depositors.’ After the closure of the bank, 4.2 account holders will not be able to get the entire amount deposited.

What will be the impact on the account holders?

How much the closure of any bank will affect its account holders depends on the amount deposited in their account. Deposit Insurance and Credit Guarantee Corporation (DICGC) deposits the money deposited in the account of those who have a deposit of up to five lakhs. But those who have an amount more than this are sure to suffer a loss. All types of deposit accounts of banks are insured by DICGC.

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