Indian Taking strict action on Tuesday, the Reserve Bank canceled the license of a bank. Yes, RBI today canceled the license of Durga Cooperative Urban Bank based in Vijayawada, Andhra Pradesh due to lack of sufficient capital and earning potential. RBI said Durga Cooperative Urban Bank will cease banking business from the close of business on November 12, 2024.
What will happen to the customers' money 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 a monetary limit of Rs five lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
95.8 percent depositors entitled to receive full amount
“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,” RBI said. DICGC has paid out Rs 9.84 crore of the total insured deposits till August 31, 2024.
Action taken under the rules of Banking Regulation Act, 1949
Regarding cancellation of the license of Durga Cooperative Urban Bank, RBI said that this bank does not have sufficient capital and earning potential. While taking this major action against the bank, RBI cited the rules of Banking Regulation Act, 1949. RBI said 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
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