Reserve Bank of India Cancels License of one Co-operative bank, Check Name Here

Reserve Bank of India Cancels License of one Co-operative bank, Check Name Here

vinti | Jun 9, 2022 | Views 4336

Reserve Bank of India Cancels License of one Co-operative bank, Check Name Here

Reserve Bank of India Cancels the License of Co-operative bank, Check Name

The Reserve Bank of India (RBI) has canceled the license of “The Mudhol Co-operative Bank Limited, Dist.- Bagalkot, Karnataka” by order dated June 3, 2022. As a result, the bank will cease to do banking activity as of June 8, 2022, at the close of business. The Karnataka Commissioner for Cooperation and Registrar of Cooperative Societies has been asked to issue an order for the bank’s winding up and the appointment of a liquidator.

The Reserve Bank canceled the license of the bank for the following reasons:

  • The bank does not have adequate capital and earning prospects. As such, it does not comply with the provisions of Section 11(1) and Section 22 (3) (d) read with Section 56 of the Banking Regulation Act, 1949.
  • The bank has failed to comply with the requirements of Section 22(3) (a), 22 (3) (b), 22(3)(c), 22(3) (d) and 22(3)(e) read with Section 56 of the Banking Regulation Act, 1949;
  • The continuance of the bank is prejudicial to the interests of its depositors;
  • The bank with its present financial position would be unable to pay its present depositors in full; and
  • Public interest would be adversely affected if the bank is allowed to carry on its banking business any further.

2. Consequent to the cancellation of its license, “The Mudhol Co-operative Bank Limited, Dist.- Bagalkot, Karnataka” is prohibited from conducting the business of ‘banking’ which includes, among other things, acceptance of deposits and repayment of deposits as defined in Section 5(b) read with Section 56 of the Banking Regulation Act, 1949 with immediate effect.

3. On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of ₹5,00,000/- (Rupees Five Lakh only) from the Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of the DICGC Act, 1961. As per the data submitted by the bank, more than 99% of the depositors are entitled to receive full amount of their deposits from DICGC. DICGC has already paid ₹16.69 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961 based on the willingness received from the concerned depositors of the bank.

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