RBI Cancels the Licence of City Cooperative Bank from Mumbai
Moneylife Digital Team 19 June 2024
The Reserve Bank of India (RBI) has cancelled the certificate of registration (CoR) of Mumbai- Maharashtra based City Cooperative Bank Ltd due to inadequate capital and poor earning prospects of the lender. RBI has asked the Bank to stop banking business from 19 June 2024.
RBI says City Cooperative Bank does not have adequate capital and earning prospects and has failed to comply with the requirements of the banking regulation act.
“The continuance of the Bank is prejudicial to the interests of its depositors. With its present financial position would be unable to pay its present depositors in full. The public interest would be adversely affected if the bank is allowed to carry on its banking business any further,” RBI says
Consequent to the cancellation of its licence, City Cooperative Bank is prohibited from conducting business, including accepting fresh deposits and repaying deposits.
According to the central bank, on liquidation, every depositor 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 City Cooperative Bank, 87% of the depositors are entitled to receive the full amount of their deposits from DICGC. As of 14 June 2024, DICGC has already paid Rs230.99 crore of the total insured deposits based on the willingness received from the concerned depositors of the Maharashtra -based Bank.
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