Banaras Mercantile Cooperative Bank’s Licence Cancelled by RBI
Moneylife Digital Team 05 July 2024
Reserve Bank of India (RBI) has cancelled the certificate of registration (CoR) of Varanasi-based Banaras Mercantile Cooperative Bank Ltd due to inadequate capital and poor earnings prospects of the lender. RBI has asked the Bank to stop banking business from 4 July 2024.
 
RBI says Banaras Mercantile Cooperative Bank does not have adequate capital and earning prospects and has failed to comply with the requirements of the Banking Regulation Act.
 
Consequent to the cancellation of its licence, Banaras Mercantile Cooperative Bank is prohibited from conducting business, including accepting fresh deposits and repaying deposits.
 
According to RBI, on liquidation, every depositor of Banaras Mercantile Cooperative Bank is entitled to receive a deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs5 lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC).
 
As per the data submitted by Banaras Mercantile Cooperative Bank, 99.98% of the depositors are entitled to receive the full amount of their deposits from DICGC. As of 30 April 2024, DICGC has already paid Rs4.25 crore of the total insured deposits based on the willingness received from the concerned depositors of the Varanasi-based Bank.
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