The Central Reserve Bank (RBI) has taken action on another bank. RBI has canceled the license of Karnataka-based Shimsha Sahakar Bank regular, Maddur, in view of its deteriorating financial condition. The bank has closed banking operations after the end of working hours on July 5, 2024. Along with this, the Registrar of Cooperative Societies of Karnataka has also been requested to issue an order to close this cooperative bank and appoint a liquidator for the bank.
What will customers get?
Every depositor of this bank will be entitled to get a claim amount of up to Rs 5 lakh on his deposits from the Deposit Insurance and Credit Guarantee Corporation (DICGC). RBI said that about 99.96 per cent of the depositors of this co-operative bank are entitled to receive the full amount of their deposits from DICGC.
reason for action
The RBI said the bank does not have adequate capital and earning prospects and its continued functioning is detrimental to the interests of its depositors. According to RBI, due to its current financial condition the bank will be unable to make full payments to its depositors.
Action on PNB
RBI has imposed a fine of Rs 1.31 crore on Punjab National Bank (PNB) for non-compliance with certain instructions related to ‘Debts and Advances’ other than KYC. The Reserve Bank said it conducted a statutory inspection with respect to the financial position of the bank as on March 31, 2022. After that a notice was issued to the bank.
After considering the bank’s response to the notice, RBI observed that PNB sanctioned working capital demand loans to two state government-owned corporations against amounts received from the government by way of subsidy/refund/reimbursement. Also, PNB failed to preserve records relating to the identity and addresses of customers obtained during business relations in some accounts, the Reserve Bank said.
