RBI Action on Cooperative Bank: RBI says that the bank does not have sufficient capital and earning prospects. RBI has also said that the bank is unable to pay all its depositors in full in its current financial position.
The Reserve Bank of India has taken a major action against the Purvanchal Cooperative Bank located in Ghazipur, Uttar Pradesh and has cancelled its banking license. The central bank has given this information in a statement. RBI says that the bank does not have sufficient capital and earning prospects.
RBI said in the statement that the Cooperative Commissioner and Registrar of Cooperative Societies of Uttar Pradesh have been asked to issue an order to close Purvanchal Cooperative Bank (Purvanchal Cooperative Bank License Cancelled) and appoint a liquidator.
Depositors will get deposit insurance up to Rs 5 lakh
Under the liquidation process, every depositor will be entitled to receive his/her deposits up to a maximum of Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
As per RBI data, 99.51% depositors of Purvanchal Sahakari Bank are entitled to receive the entire deposit amount from DICGC.
The bank is currently unable to pay all the depositors in full
RBI has also said that the bank is unable to make full payment to all its depositors in its current financial position.
The bank does not have sufficient capital and earning potential
The central bank said, “The bank does not have adequate capital and earning prospects. If the bank is allowed to continue banking business further, it will adversely affect public interest.”
