RBI Action on Co-operative Banks: RBI said, “If the bank is allowed to continue its banking business further, it would adversely affect public interest.”
The Reserve Bank of India has cancelled the licence of Banaras Merchantile Co-operative Bank Ltd, Varanasi. The Reserve Bank said that the licence of the bank has been cancelled due to lack of adequate capital and no possibility of income. The bank stopped banking business from July 4.
The RBI said, “As a result of the cancellation of the licence, Banaras Merchantile Co-operative Bank Ltd, Varanasi has been barred from doing ‘banking’ business with immediate effect. Along with this, deposit and withdrawal of money has also been banned.”
The Reserve Bank said on Thursday that the Cooperative Commissioner of Uttar Pradesh and the Registrar of Cooperative Societies have also been requested to close the bank and appoint a liquidator for it.
RBI said, “If the bank is allowed to continue its banking business further, it will adversely affect the public interest.” RBI also said that every depositor will be entitled to receive the deposit insurance claim amount of his deposits up to the monetary limit of Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
99.98% depositors entitled to receive their full amount
As per the data submitted by the bank, 99.98 percent of the depositors are entitled to receive the full amount of their deposits from DICGC. As of April 30, 2024, DICGC has already paid Rs 4.25 crore out of the total insured deposits based on the wishes received from the respective depositors of the bank.