The Reserve Bank of India (RBI) has canceled the license of another cooperative bank. The name of this co-operative bank is- Banaras Mercantile Co-operative Bank, Varanasi. RBI has taken this decision in view of the deteriorating financial condition of the bank. With this, this bank will no longer be able to do banking business.
What did RBI say?
RBI said the co-operative bank does not have adequate capital and earning potential and its continuation is not in the interests of its depositors. The Reserve Bank said- Due to its current financial condition the bank will be unable to make full payments to its depositors. Apart from this, the Cooperative Commissioner of Uttar Pradesh and the Registrar of Cooperative Societies have also been requested to issue an order to close the bank and appoint a liquidator.
What will happen to the customers?
The central bank said that as per the data submitted by the bank, 99.98 per cent of depositors are entitled to receive their entire deposits from the Deposit Insurance and Credit Guarantee Corporation (DICGC). On liquidation, every depositor will be entitled to receive deposit insurance claim amount up to Rs five lakh on his deposits from DICGC. DICGC has already paid Rs 4.25 crore out of the total insured deposits under the provisions of the DICGC Act based on the willingness received from the respective depositors of the bank till April 30.
Registration certificates of many banks returned
Earlier, the Reserve Bank said that nine non-banking financial companies (NBFCs), including Ujjivan Financial Services, have returned their Certificate of Registration (COR) to the central bank. Of these, five NBFCs have surrendered their registration certificates due to their exit from non-banking financial institution business. Their names are Wigfin Holdings, Strip Commercial, Allium Finance, Eternite Finvest and Fino Finance. Apart from these, Allegro Holdings, Temple Trees Impex & Investments and Hem Financial Services have returned their certificates after meeting the prescribed criteria for unregistered key investment company (CIC). CIC does not require registration.
