RBI canceled the license of this bank, know what will happen to the customers’ money by StuffsEarth

Estimated read time 6 min read

Every depositor will be entitled to get his deposits up to only five lakh rupees from the Deposit Insurance and Credit Guarantee Corporation (DICGC). RBI said that if the bank is allowed to continue banking business further, it will have an adverse effect on public interest.

India’s central bank, the Reserve Bank of India (RBI), has cancelled the licence of Ghazipur-based Purvanchal Sahakari Bank in Uttar Pradesh. The central bank said on Monday that Purvanchal Sahakari Bank does not have adequate capital and earning prospects. The RBI said in a statement that the Cooperative Commissioner and Registrar of Cooperative Societies of Uttar Pradesh have been asked to issue an order to close the bank and appoint a liquidator.

Entitled to get only up to five lakh rupees

According to the news, under the liquidation, every depositor will be entitled to get his deposit amount of only up to five lakh rupees from the Deposit Insurance and Credit Guarantee Corporation (DICGC). RBI said that according to the data of Purvanchal Cooperative Bank, about 99.51 percent of the depositors are entitled to get their entire deposit amount from DICGC.

The bank does not have sufficient capital and earning prospects

The central bank said that the cooperative bank is unable to make full payment to its current depositors with its current financial position. RBI said that the bank does not have sufficient capital and earning prospects. If the bank is allowed to continue banking business further, it will have an adverse effect on public interest.

The Reserve Bank of India keeps reviewing cooperative banks from time to time. After any major flaw is found, RBI takes action against these banks. Even before this, action has been taken against some banks, their bank licenses have been cancelled.

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