The Reserve Bank of India (RBI) has canceled the license of United Co-operative Bank Limited, Bagnan on Thursday. This bank is operated in West Bengal. RBI has said in a statement that the bank’s cotton is not enough capital and there is no possibility of earning. Explain that the RBI had also taken action against this bank 3 years ago on July 18, 2018.
Then the RBI imposed restrictions on many services, including investment, loaning, renewal of the scheme to the bank without written permission. However, then the RBI had made it clear that the bank’s license should not be considered as a cancellation of this action. But this time RBI has canceled the license of Knight Cooperative Bank Limited.
Where is this bank located in Bengal?
The United Co-operative Bank, whose license has been canceled by the RBI, is located in Bagnan in Howrah district of West Bengal. This bank is being operated on Bagnan Station Road.
The public interest will be adversely affected if banking continues
The Reserve Bank canceled the license of the bank due to a lack of sufficient capital and earning potential for the bank. RBI said, “It does not comply with the provisions of Section 11 (1) and Section 22 (3) (d) of Section 56 of the Banking Regulation Act, 1949.”
RBI said that keeping the bank continuous is not in the interest of its depositors. According to the financial position of the bank, it will be unable to make full payment of the existing account holders or depositors. RBI said that public interest will be adversely affected if the bank is allowed to carry on banking business.
RBI has clarified that the cancellation of the license means that United Co-operative Bank Limited, Bagan, West Bengal has been banned from doing ‘banking’ business.
When and how will the money be returned to customers?
All depositors of the bank will be returned full deposit through Deposit Insurance and Credit Guarantee Corporation (DICGC). The RBI said that with the cancellation of license and commencement of necessary proceedings, the depositors will be returned to the depositors under the DICGC Act, 1961. According to the data provided by the bank about the customers, the entire amount will be returned to all depositors. However, according to the central rules, a maximum limit of up to Rs 5 lakh will also be followed.
RBI has taken action on many banks
Earlier, the Reserve Bank of India had canceled the license of many banks due to financial disturbances and violation of rules. In January this year, the RBI had canceled the license of Vasantdada Nagari Sahakari Bank, based in Osmanabad, Maharashtra, in view of the disregard of banking rules and security of depositors capital. Explain that earlier on 11 May 2021, RBI imposed a fine of Rs 3.50 lakh on Siddheshwar Cooperative Bank, Latur and Rs 1 lakh on Shankar Nagari Cooperative Bank Limited, Maharashtra.