RBI canceled the license of the following banks – Do you have an account in these banks? Is your money safe?

RBI i.e. The Reserve Bank of India, is India’s central bank and regulatory body which is responsible for the regulation of the Indian banking system and the Indian rupee, current governor of RBI is Shri Shaktikanta Das.

RBI had asked the following banks to stop banking businesses because of the lack of adequate capital and poor earning prospects.

• The license of Uttar Pradesh-based united india cooperative bank ltd has been canceled by the central bank due to a lack of capital and earning prospects. RBI had ordered the concerned authority to wind up these banks as it will not be to the benefit of the public to let these banks operate because of the lack of capital and poor earning prospect. The next important question is whether depositors will get their money back. This we will answer at the end of this blog
• Maharashtra’s Yavatmal-based, Babaji Date Mahila Sahakari Bank’s license has been canceled by the Reserve Bank of India because they do not have much or adequate capital and earning prospects.
• The RBI has canceled the license of Garha Co-operative Bank, Guna in Madhya Pradesh as they do not have adequate capital and earning prospects.

RBI had prohibited these banks from different banking businesses.

Why RBI canceled the license of the banks

• Inadequate capital and poor earnings.
• Bank has failed to comply with the requirements under different sections.
• Public interest is also affected if these banks continue their banking business.

Will depositors get back their money?

• On liquidation, every depositor would be entitled to receive a deposit insurance claim amount of their deposits up to a monetary ceiling of Rs 5 lakhs, which has been set by DICGC from Deposit Insurance and Credit Guarantee Corporation (DICGC).

Author – Shreya Singh