- The Reserve Bank of India has canceled the license of Independence Co-operative Bank Ltd., Nashik, Maharashtra w.e.f February 03, 2022 evening.
- Reason for license cancelation: 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.
- What will happen to depositor’s money?: Once the liquidation process of the bank is over, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs. 5,00,000/- from Deposit Insurance and Credit Guarantee Corporation (DICGC). In this case, more than 99% of the depositors are entitled to receive full amount of their deposits from DICGC.
- As on January 27, 2022, DICGC has disbursed ₹2.36 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act,1961 based on the willingness received from the concerned depositors of the bank.
Points to remember:
- Where is Independence Co-operative Bank Ltd. located?- Nashik, Maharashtra
- RBI has canceled the license of which bank recently?
- Section 18 A of DICGC Act– Payment to Depositors of Insured Banks under All Inclusive Directions (AID)– DICGC shall pay the depositors of the insured banks (as per list) placed under AID (with restrictions on withdrawal of deposits), an amount equivalent to the deposits outstanding (up to a maximum of Rupees Five Lakh only) within a period not exceeding 90 days.