RBI said, “As per the data shown by the bank, 95.8 per cent of the depositors of the bank 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.
The Reserve Bank of India took a tough step on Tuesday and canceled the license of a bank. Yes, RBI today canceled the license of Vijayawada-based Durga Cooperative Urban Bank in Andhra Pradesh for not having sufficient capital and earning prospects. RBI said that Durga Cooperative Urban Bank will stop banking business from the close of business on November 12, 2024.
What will happen to the money of the customers deposited in the bank
Along with this, 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. On liquidation, every depositor (customer) of the bank will be entitled to receive the deposit insurance claim amount on his deposits up to the monetary limit of Rs five lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
95.8 percent depositors entitled to receive full amount
RBI said, “As per the data shown by the bank, 95.8 percent depositors of the bank 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.
Action taken under the rules of the Banking Regulation Act, 1949
Regarding the cancellation of the license of Durga Cooperative Urban Bank, RBI said that this bank does not have adequate capital and earning prospects. RBI took this big action against the bank citing the rules of the Banking Regulation Act, 1949. RBI said that Durga Cooperative Urban Bank failed to comply with the rules of the Banking Regulation Act, 1949.
The bank was harmful to the interests of customers
The Reserve Bank of India further said about this action, “The continuation of the bank is harmful to the interests of its depositors. Due to its current financial position, the bank will be unable to pay its existing depositors in full.”