RBI / Karad Janata Sahakari Bank: Reserve Bank of India (RBI) has given a jolt to a cooperative bank in Maharashtra. RBI has canceled the license of Karad Janata Sahakari Bank. The Reserve Bank said that this action has been taken due to lack of sufficient capital and earning potential. However, the RBI also said that this means that the bank does not have the right to make any deposit. The Reserve Bank said that due to the cancellation of the license, the Karad Janata Cooperative Bank will not be able to do banking business after the business ends on December 7.
Bank has no capital left
Earlier, the Reserve Bank had some restrictions on Karad Janata Cooperative Bank since November 2017. The Reserve Bank had also ordered to appoint a liquidator of the bank. According to RBI, according to the rules of section 22, the bank no longer has capital and there is no scope of earning. The Karad Bank Banking Regulation did not meet the standards of section 56 of 1949, due to which its license has been canceled.
What will happen to the depositors
RBI has said that all the depositors will get back deposits of up to 5 lakh rupees from Deposit Insurance and Credit Guarantee Corporation based on general terms and conditions. More than 99 percent of the bank’s depositors will get the full amount of their deposits from the Deposit Insurance and Credit Guarantee Corporation (DICGC). With the commencement of some necessary action to cancel the license, the process of payment to the depositors of the Karad Janata Cooperative Bank will be started.
Source: www.financialexpress.com