On Monday, the Reserve Bank of India did something significant to a bank – it canceled its license.
The bank in question is Shankarrao Pujari Nutan Nagari Cooperative Bank Limited, found in Kolhapur, Maharashtra.
The RBI did this because the bank doesn’t have enough money and ways to make money.
The RBI has told the bank to stop all kinds of business starting from December 4, 2023.
The bank was short of capital
The Reserve Bank has shared some important information. The Shankarrao Pujari Nutan Nagari Sahakari Bank Limited in Kolhapur won’t be able to offer any banking services from December 4.
Also, they can’t accept any payments or deposits. The Central Bank explained that this bank doesn’t have enough money to offer banking services.
Also, the bank hasn’t shared any clear plan on how it will make money in the future.
In this case, the bank didn’t follow the rules of RBI. To protect the customers’ interests, RBI has decided to cancel the bank’s license.
What will happen to customers’ money?
Now that the Reserve Bank canceled the bank’s license, people are wondering what will happen to the money they put in the bank.
The good news is that customers are insured by the Depositors Insurance and Credit Guarantee Corporation (DICGC) for deposits up to Rs 5 lakh.
DICGC is connected to the Reserve Bank of India and provides insurance for amounts up to Rs 5 lakh.
So, if you have deposited Rs 5 lakh or less, you’ll get all your money back. But if you have more than Rs 5 lakh, you can only claim up to Rs 5 lakh.
Fine imposed on these banks
Lately, the Reserve Bank of India has given big fines to many banks because they didn’t follow the rules.
Specifically, RBI has put a money penalty on three co-operative banks, which includes HDFC Bank and Bank of America.
Additionally, penalties were imposed on Jijamata Mahila Cooperative Bank Limited, Shri Lakshmi Kripa Urban Cooperative Bank Limited, The Konark Urban Cooperative Bank Limited, and The Chembur Nagarik Cooperative Bank Limited.
