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Rupee Co-operative Bank Ltd., situated in Pune, had its licence revoked by the Reserve Bank of India (RBI) last month. The direction of the central bank will take effect as of right now. Accordingly, the bank will stop doing banking activity as of September 22, 2022, the RBI said on August 10.
With effect from September 22, 2022, “Rupee Co-operative Bank Ltd, Pune” would be unable to undertake banking activities, including accepting deposits and repaying deposits, among other things, as a result of the revocation of its licence, the statement stated.
Why Did Rbi Cancel the Licence of Rupee Co-operative Bank, Pune
The bank’s licence has been revoked since it does not meet the requirements of the Banking Regulation Act of 1949 because it lacks sufficient capital and earning potential.
The Banking Regulation Act of 1949’s Sections 11(1) and 22(3)(d) are not followed, and neither is Section 56. According to the RBI, the bank has not complied with Sections 22(3)(a), 22(3)(b), 22(3)(c), 22(3)(d), and 22(3)(e) read with Section 56 of the Banking Regulation Act, 1949.
The RBI stated that the bank’s continued existence would be detrimental to the interests of its depositors since “the bank with its current financial status would be unable to pay its present depositors in full.”
What Will Happen to Depositors Money
More than 98% of depositors are eligible to collect the full value of their savings from the Deposit Insurance and Credit Guarantee Corporation, according to information provided by the cooperative bank (DICGC). The DICGC has already paid out ₹700.44 crore of the entire insured deposits as of May 18, 2022.
Each depositor would be eligible to collect a deposit insurance claim sum of up to ₹5 lakh from DICGC upon liquidation.