RBI Cancelled Bank License: The Reserve Bank of India (RBI) said on January 12 that it has canceled the license of this bank citing weak financial condition.
The Reserve Bank of India (RBI) said on January 12 that it has canceled the license of The Hiriyur Urban Co-operative Bank citing weak financial condition. “The survival of the bank is detrimental to the interests of its depositors as the bank, with its current financial position, would be unable to make full payments to its existing depositors,” the RBI said in a press release. If the bank is allowed to continue its banking business further, public interest will be adversely affected.
Impact on customers
RBI said that after the cancellation of the license, the bank is prohibited from carrying on the business of ‘banking’, which includes acceptance of deposits and repayment of deposits, with immediate effect. The central bank said on liquidation, every depositor will be entitled to receive the deposit claim amount of his deposits up to a monetary limit of Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC) under the provisions of the DICGC Act 1961.
Customer entitled to receive full amount
According to the data presented by the bank, 99.93 percent of the depositors are entitled to receive the full amount of their deposits from DICGC. According to the release, it has been said that till September 30, 2023, DICGC has already paid Rs 224.53 lakh of the total insured deposits based on the wishes received from the respective depositors of the bank.
