Reserve Bank of India: The Reserve Bank of India (RBI) has once again canceled the licenses of two banks. This time RBI has taken action against these two banks.
Cooperative Banks License: The Reserve Bank of India (RBI) has once again canceled the licenses of two banks. This time RBI has taken action against Shree Sharda Mahila Sahakari Bank located in Tumkur, Karnataka and Harihareshwar Bank located in Satara, Maharashtra. The central bank said that the two co-operative banks did not have ‘sufficient capital and earning potential’. In the case of Harihareshwar Sahakari Bank, the order for closure of business has become effective from July 11, 2023.
Account holder entitled to receive deposit insurance claim amount
About 99.96 percent of the depositors of the bank will be given their total deposits from the Deposit Insurance and Loan Guarantee Corporation (DICGC). At the same time, about 97.82 percent of the depositors of Shri Sharda Mahila Sahakari Bank will be refunded the full amount of their deposit from DICGC. On liquidation, each depositor will be entitled to receive the deposit insurance claim amount for his deposits up to Rs.5 lakh from the DICGC.
Both banks do not have proper capital and earning potential
After the cancellation of the license, the banks have been banned from bank related activities. This includes acceptance of deposits and repayment of deposits, among other things. RBI said that both the cooperative banks do not have proper capital and earning potential. The bank said that both the banks are unable to return the entire money of their depositors in view of their current financial condition.
Earlier, RBI had canceled the license of two co-operative banks operating in Maharashtra and Karnataka. After this, all kinds of business of both the banks have stopped from July 5, 2023. Following the Reserve Bank’s order, the banking licenses of Buldhana-based Malkapur Urban Cooperative Bank Limited and Bengaluru-based Sushruti Souharda Sahakar Bank Regular have been canceled from July 5.
