Bank license canceled: RBI canceled the license of this bank, know what will happen to the money deposited by the customers

The Reserve Bank took a big action on a bank on Wednesday and announced to cancel the license of the bank. RBI says that the bank does not have sufficient capital and earning prospects.

RBI Action On Bank: The Reserve Bank has taken a big action on a bank on Wednesday and has announced to cancel the license of the bank. RBI says that the bank does not have sufficient capital and earning prospects. This bank is Ahmedabad-based ‘Color Merchants Co-operative Bank’. RBI has canceled the license of Color Merchants Co-operative Bank. RBI said, “The continuation of the bank will be detrimental to the depositors in future. With its current financial position, the bank will be unable to pay its current depositors in full.” In such a situation, bank customers are worried about what will happen to their deposited money now.

What will happen to the customers’ money

The Reserve Bank of India (RBI) said in a statement that the Registrar of Cooperative Societies, Gujarat has also been requested to issue an order to close the bank and appoint a liquidator for the bank. Now as per the rule, every depositor will be entitled to receive deposit insurance claim amount of his deposits up to Rs 5 lakh only from the Deposit Insurance and Credit Guarantee Corporation (DICGC).

RBI further said that as per the data submitted by the cooperative bank, about 98.51 per cent of the depositors are entitled to receive the full amount of their deposits from DICGC. As of March 31, 2024, DICGC has already paid Rs 13.94 crore out of the total insured deposits based on the wishes received from the respective depositors of the bank.

What RBI said

Giving reasons behind the cancellation of the license, RBI said that the bank does not have adequate capital and earning prospects. The cooperative bank has also failed to comply with certain requirements under the Banking Regulation Act. RBI also said that if the bank is allowed to continue its banking business further, it would adversely affect the public interest. After the cancellation of the license, the cooperative bank will stop banking business from the close of business on Wednesday (April 16, 2025). Banking business includes, among other things, accepting deposits and repayment of deposits.

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