The Reserve Bank of India has cancelled the license of Independence Co-operative Bank Ltd., Nashik, Maharashtra w.e.f February 03, 2022. The major reason for the cancellation of the license by RBI is that bank does not have adequate capital and earning prospects. This means that 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.
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Now, what will happen to depositors’ money?
- The bank has stopped operation from the close of business on February 3, putting depositors of the bank in trouble. They would however receive up to Rs five lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC), after the bank’s liquidation.
- RBI has told the Commissioner for Cooperation and Registrar of Cooperative Societies in Maharashtra to issue an order for winding up the bank and appoint a liquidator. As per the data submitted by the bank, more than 99 per cent of the depositors are entitled to receive the full amount of their deposits from DICGC.
Important takeaways for all competitive exams:
- DICGC Chairperson: Michael Patra;
- DICGC Founded: 15 July 1978;
- DICGC Headquarters: Mumbai.
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