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This cooperative bank closed, RBI canceled the license, know what will happen to customers’ money now?

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The Reserve Bank of India (RBI) on Thursday canceled the license of a co-operative bank. RBI said that it has canceled the license of The Laxmi Co-operative Bank Limited based in Solapur (Maharashtra). The central bank said that there is no capital and earning potential left with the co-operative bank. RBI said that Lakshmi Sahakari Bank will close its business after the closure of business on Thursday (September 22, 2022).

Why was the bank’s license canceled?

According to the statement of the central bank, the cooperative bank has failed to comply with the requirements of the Banking Regulation Act, 1949 and its continuance is prejudicial to the interests of its depositors.

“The bank with its present financial position will be unable to make full payment to its existing depositors,” RBI said.

Consequent upon the cancellation of its licence, the Bank is prohibited from carrying on the business of ‘Banking’, which includes, among other things, acceptance of deposits and repayment of deposits.

what will happen to the customers money

RBI said in a statement that as per the data furnished by the cooperative bank, more than 99 per cent of the depositors are entitled to receive the full amount of their deposits from the Deposit Insurance and Credit Guarantee Corporation (DICGC). As on September 13, 2022, DICGC has already paid Rs 193.68 crore of the total Sum Assured.

Customers will be able to withdraw up to Rs 5 lakh

RBI said that the Commissioner of Cooperatives and Registrar of Cooperative Societies, Maharashtra have also been requested to issue an order to close the bank and appoint a liquidator for the bank. On closure of the bank, the customer will be entitled to receive a deposit insurance claim amount of up to Rs.5 lakh of his/her deposit from DICGC.

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