Reserve Bank of India Decision
The banking sector regulator, the Reserve Bank of India, took an important decision on Tuesday. The Central Bank has canceled the license of a Vijayawada-based bank. Problems related to capital were identified in this bank, after which the possibility was seen that the bank would not be able to return money to its clients, so it was decided to cancel its license.
The central bank RBI has canceled the license of Durga Co-operative Urban Bank. The bank lacked sufficient capital and future profit potential was also low. Therefore, the bank’s license was cancelled. The bank was instructed to close its activities from November 12, 2024.
4% of customers may suffer losses
According to the RBI order, due to cancellation of the bank’s license, around 4 per cent of its customers may suffer losses. However, the good news is that this decision will not affect 95.8 percent of customers. They will receive their money deposited in the bank in full. The work of returning your deposits will be carried out by the Deposit Insurance and Credit Guarantee Corporation (DICGC). People of the country get insurance protection on their total deposits in banks up to Rs 5 lakh.
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In its order, the RBI has asked the Andhra Pradesh Cooperative Commissioner and the Registrar of Cooperative Societies to close the bank. Not only this, these institutions have also been asked to appoint a liquidation officer to close the bank.
This amount of money was distributed until August.
The possibility of closing this bank had already been foreseen. Thus, DICGC had paid out Rs 9.84 crore of the total insured deposits till August 31, 2024. Regarding cancellation of license of Durga Cooperative Urban Bank, the RBI said the bank could not follow the rules of the Banking Regulation Act, 1949. Therefore, using its powers, it has canceled the license of the bank.
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