Ritika
RBI Canceled Bank License: The Reserve Bank of India (RBI) on Thursday tightened the noose on another bank and directed its closure with immediate effect. It is a cooperative bank of Maharashtra. Its name is Maharashtra Laxmi Co-operative Bank Limited (Maharashtra’s Laxmi Co-operative Bank). RBI informed that it has canceled the license of Laxmi Sahakari Bank Limited of Maharashtra. As a result, the Bank now ceases to conduct banking business from today (September 22).
The Bank Regulatory has requested the Commissioner for Cooperation and Registrar of Co-operative Societies, Maharashtra to issue an order to close the bank and appoint a liquidator for the bank. Let us tell you that earlier RBI has taken strict action on many co-operative banks and from today another Pune based Rupee Co-operative Bank Limited was closed.
What did RBI say?
RBI said that the bank does not have sufficient capital and earning potential. “As such, it does not comply with the provisions of section 11(1) and section 22(3)(d) read with section 56 of the Banking Regulation Act, 1949.”
The central bank said that if the business of the bank is not closed, then the depositors will suffer a lot. RBI said, “The bank with its present financial position will be unable to make payments to its depositors. If the bank is allowed to carry on its banking business, public interest will be adversely affected.” After the cancellation of the licence, the co-operative bank is now barred from carrying on the business of ‘banking’ which includes deposits and withdrawals.
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What will happen to customers’ money?
Let us tell you that this bank customers will get an insurance cover of Rs 5 lakh through the Deposit Insurance and Credit Guarantee Corporation (DICGC) insurance scheme of RBI. That is, under this rule, if a bank has to be closed due to poor financial condition, then the customer gets the benefit of insurance cover on deposits up to Rs 5 lakh through DICGC and this money gets to the customers. Let us tell you that even if there is crores of rupees in the account of a customer, now only 5 lakh rupees will be given as insurance.
