Bank License Cancelled: Reserve Bank of India has canceled the license of another bank. Apart from this, RBI has also imposed heavy penalty on some banks. Know what will happen to the money of its account holders.
Reserve Bank of India has decided to cancel the license of a bank. The name of the bank whose license has been canceled by the central bank is Kerala-based Adoor Co-operative Urban Bank. Even though the license of this bank has been cancelled, it can now work as a Non-Banking Finance Company (NBFC).
Bank business has been banned on this day
According to the notification issued by the Reserve Bank, an order has been issued to ban the business from April 24, 2023 itself. It is noteworthy that the Adoor Co-operative Urban Bank Limited of Kerala was given a banking license on January 3, 1987, under the Banking Regulation Act. After this, RBI has canceled the license of the bank by issuing a notification.
What will happen to the customers’ money?
After the license is cancelled, the biggest question is what will happen to the customers’ money? It is worth noting that depositors get an insurance cover of up to Rs 5 lakh from the Insurance and Credit Guarantee Corporation (DICGC). DICGC is a subsidiary of the Reserve Bank which helps in providing financial security to the customers. The customers who had deposited less than Rs 5 lakh in this bank will get the entire money back. At the same time, the full amount will not be refunded on deposits of more than Rs 5 lakh.
RBI imposed a fine of Rs 44 lakh on these banks
Apart from this, the Reserve Bank has imposed a fine of Rs 44 lakh on 4 co-operative banks. This fine has been imposed by RBI for ignoring the rules. The banks on which action has been taken are The Tamil Nadu State Apex Co-operative Bank, Chennai-based The Tamil Nadu State Apex Co-operative Bank, Bombay Mercantile Co-operative Bank, Janata Sahakari Bank, Pune ( Janata Sahakari Bank Pune) and Baran Nagrik Sahakari Bank Baran, Rajasthan
