RBI said that due to its current financial position the bank will be unable to make full payment to its existing depositors. As per the data submitted by Durga Cooperative Urban Bank, 95.8 per cent of the depositors are entitled to receive the full amount of their deposits from DICGC
The Reserve Bank of India (RBI) has canceled the license of Vijayawada-based Durga Co -operative Urban Bank. RBI did this because the bank does not have sufficient capital and earning prospects. RBI said that the bank will stop banking business after the close of business on November 12, 2024. Also, the central bank has asked the Commissioner for Cooperation and Registrar of Cooperative Societies of Andhra Pradesh to issue an order to close the bank and appoint a liquidator.
RBI said that the bank has not been able to comply with the rules of the Banking Regulation Act, 1949. The continuation of Durga Cooperative Urban Bank is detrimental to the interests of its depositors. Due to its current financial position, the bank will be unable to pay its existing depositors in full.
Depositors’ money up to Rs 5 lakh is safe
Upon liquidation, every depositor of Durga Cooperative Urban Bank will be entitled to receive deposit insurance claim amount on his deposits up to a monetary limit of Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC). “As per the data submitted by the bank, 95.8 per cent of the depositors are entitled to receive the full amount of their deposits from DICGC,” RBI said. DICGC has paid Rs 9.84 crore out of the total insured deposits till August 31, 2024.
Earlier in July, RBI had cancelled the license of Karnataka-based Shimsha Sahakara Bank Niyamiti, Maddur due to its deteriorating financial condition. RBI had said in a statement that the bank will stop banking operations after the end of working hours on July 5, 2024. The Registrar of Cooperative Societies of Karnataka was also requested to issue an order to close this cooperative bank and appoint a liquidator for the bank. In June this year, RBI had cancelled the license of Purvanchal Sahakari Bank located in Ghazipur, Uttar Pradesh. The central bank said that Purvanchal Sahakari Bank does not have adequate capital and earning prospects.
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