RBI said that the bank will stop doing its business after six weeks from today. The bank will be barred from ‘banking’ business. Therefore, customers will neither be able to deposit nor withdraw money.
The Reserve Bank of India (RBI) has taken strict action against another bank. The central bank has now canceled the license of the Pune-based Rupee Co-operative Bank Ltd. This order will be effective after six weeks from today i.e. 22 September 2022.
What did the bank say?
RBI said on Wednesday, “The central bank is hereby canceling the license of this co-operative bank based in Pune in compliance with the order of the Bombay High Court on September 12, 2017. The central bank said that the financial position of the Rupee Co-operative Bank has deteriorated and the bank is not in a position to return the money to its depositors. In such a situation, the bank will have to close its business after 6 weeks from now. RBI said that if Rupee Co-Operative Bank was allowed to carry on its banking business, it would have had a bad impact on the public.
Bank will have to close business after 6 weeks
RBI said that the bank will stop doing its business after six weeks from today. RBI said that the bank will be banned from ‘banking’ business. Therefore, customers will neither be able to deposit nor withdraw money. The Reserve Bank said that the banking license of Rupee Co-Operative Bank has been canceled as the bank does not have sufficient capital and earning potential. It does not comply with the provisions of Section 11(1) and Section 22(3)(d) of the Banking Regulation Act, 1949 as well as Section 56. The bank has failed to comply with the requirements of sections 22(3)(a), 22(3)(b), 22(3)(c), 22(3)(d) and 22(3)(e) . RBI further said, subject to the provisions of the DICGC Act, 1961, each depositor shall be entitled to receive a deposit insurance claim amount up to ₹ 5,00,000 (Rupees five lakhs).
