Categories: Banking

RBI scraps licence of MP-based Garha Co-operative Bank

RBI scraps licence of MP-based Garha Co-operative Bank

The Reserve Bank of India (RBI) due to insufficient capital and earning potential revoked the licence of Madhya Pradesh’s Garha Co-operative Bank, Guna. According to a statement from the RBI, approximately 98.4% of the depositors of the cooperative bank are eligible to receive the full value of their savings from the Deposit Insurance and Credit Guarantee Corporation (DICGC).

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RBI scraps licence of MP-based Garha Co-operative Bank: Key Points

● The bank is immediately forbidden from carrying out a number of activities, including accepting deposits and repaying deposits, as a result of the termination of its licence.
● The bank lacks sufficient capital and earning potential, according to the RBI, which revoked the licence with effect as of Monday’s end of business hours.
● Furthermore, it stated that given its current financial situation, Garha Co-operative Bank would be unable to fully reimburse its depositors.

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What will happen to the depositors?

● Every depositor would be entitled to receive the deposit insurance claim amount of his or her deposits from DICGC upon liquidation, up to a maximum financial limit of Rs 5,00,000.
● DICGC has already paid out Rs 12.37 crore of the total protected deposits as of December 19, 2022, depending on the consent given by the relevant bank depositors.

Also Read: Karnataka Bank awarded ‘Prathista Puraskar for achieving the highest percentage in BHIM-UPI transactions

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