Recently, the Reserve Bank of India (RBI) took action to cancel the license of Mumbai’s City Co-operative Bank Limited due to its financial instability.
This decision was based on concerns over the bank’s inadequate capital and earning prospects, which could adversely affect its depositors.
Deposit Insurance Coverage up to Rs 5 Lakh
According to information from RBI, the Deposit Insurance and Credit Guarantee Corporation (DICGC) will provide insurance coverage to every account holder of the closed bank, up to a maximum of Rs 5 lakh per depositor.
As of June 14, 2024, DICGC has already disbursed Rs 230.99 crore to depositors based on their claims.
Recent License Cancellation of Purvanchal Co-operative Bank Limited
Two days ago, RBI also cancelled the license of Purvanchal Co-operative Bank Limited.
This action follows an investigation report from last year which prompted legal proceedings against former bank officials and related parties.
RBI has initiated refunds totaling Rs 12.63 lakh crore to 912 account holders and is in the process of refunding Rs 22.92 crore to 1691 account holders
who deposited less than Rs 5 lakh in the bank.
Recent Cancellations of Cooperative Bank Licenses
In another recent development, the RBI also revoked the license of Purvanchal Co-operative Bank Limited.
This action followed an investigation that resulted in legal proceedings against former officials and related parties.
The RBI has already refunded Rs 12.63 lakh crore to smaller depositors and is in the process of refunding Rs 22.92 crore to other affected account holders.
This restructuring is aimed at safeguarding depositors’ interests and ensuring financial stability within the cooperative banking sector.
