In view of inadequate capital and profit potential, the Reserve Bank of India has revoked banking licenses for two cooperative banks in Maharashtra and Karnataka.The banks have stopped operations and depositors are entitled to an amount of up to 5 million from the DICGC.
Malkapur Urban Co-operative Bank Ltd, Buldhana and Shushruti Souharda Sahakara Bank Niyamita Bengaluru were disinsued of their licenses.
As the trading was closed on Wednesday, both Cooperative Banks discontinued their commercial operations with immediate effect, RBI stated in a number of different statements.
The Reserve Bank of India stated that,’ the banks did not have adequate capital and income potential, as they were facing a current financial situation which would put them in difficulty to fully repay the existing depositors’.
The Deposit Insurance and Credit Guarantee Corporation (DICGC) shall be able to provide deposit insurance claim amount for the deposits up to 5 lakhs for each depositor, when they are liquidated. DICGC has already paid ₹496.98 crore in total for the insured deposits.
In the case of Malkapur urban co-operative bank, ‘RBI informed that 97.60 % of depositors have an entitlement to a full portion of their savings from DICGC as far as information provided by it is concerned’.
As far as Shushruti Souharda Sahakara Bank Niyatara is concerned, ‘RBI said that 91.92 percent of the depositors are entitled to obtain full deposits from DICGC in accordance with the data provided by the lender.
DICGC has made payments of ₹54.16 million as on May 31, 2023 in respect of the overall guaranteed deposits.