The Reserve Bank of India (RBI) has canceled the licenses of banks in Maharashtra, one of which is Subhadra Local Area Bank in Kolhapur. The banking sector regulator in the case said that the manner in which this bank was operating could harm the interests of existing and future depositors, which led to the decision.
Violation of minimum net worth condition
In this context, RBI said in a statement that the bank has violated the minimum net worth stipulation in two quarters of FY 2019-20. However Subhadra Local Area Bank has enough cash to return depositors’ money.
Bank will not be able to do any banking activities
The nature of management’s work in the present and future was going to harm the interests of depositors.
This will prevent him from doing any banking activities. RBI will file before the High Court for liquidation of the bank.
License of Karad Janta Cooperative Bank also canceled this month
In December, the Reserve Bank also canceled the license of Maharashtra-based Karad Janata Sahakari Bank Limited.
The Reserve Bank said in a statement that more than 99 percent of the bank’s depositors will get their full payment from the Deposit Insurance and Credit Guarantee Corporation. With the cancellation of license and commencement of liquidation proceedings, the process of payment to depositors of The Karad Janata Sahakari Bank will be initiated.
After the liquidation, every depositor will get a refund of up to five lakh rupees from the Insurance and Credit Guarantee Corporation as per the general insurance terms and conditions. The Reserve Bank said that due to the cancellation of license, Karad Janata Cooperative Bank will not be able to do business.
This means that now the Karad Janata Cooperative Bank will not be able to repay the deposits or deposits of customers.
Nidhi Malviya is fun loving girl. She writes at NoobFeeds about various topics related to Finance, Technology, Business etc.