Bank License cancelled: RBI again cancelled the license of another bank, what will happen to the money deposited by the customers?

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Another bank customer is in big trouble. Reserve Bank of India (RBI) has taken a big action. RBI has announced to cancel the license of a co-operative bank.

The central bank said on Friday that it has cancelled the license of Imperial Urban Co-operative Bank located in Jalandhar, Punjab. According to RBI, the bank does not have sufficient capital and earning prospects. The Registrar of Co-operative Societies of Punjab Government has also been requested to issue an order to close the bank and appoint a liquidator for the bank.

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What did RBI say?

Giving reasons for cancelling the licence of Imperial Urban Co-operative Bank, RBI said that the continuation of the bank would be detrimental to the interests of its depositors. “In its current financial position, the bank would be unable to make full payments to its depositors,” RBI said. RBI also said that public interest would be adversely affected if the bank was allowed to continue with banking business. As a result of the cancellation of the licence, Imperial Urban Co-operative Bank is prohibited from carrying on banking business with immediate effect, which among other things includes accepting deposits and repayment of deposits.

What will happen to the money deposited by the customers?

Every depositor will be entitled to receive the deposit insurance claim amount on his deposits up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC). According to data submitted by the bank, RBI said that 97.79 per cent of the depositors are entitled to receive the full amount of their deposits from DICGC. As of January 31, 2025, DICGC has already paid Rs 5.41 crore out of the total insured deposits.

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