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The Central Bank of India, Reserve Bank of India (RBI) has recently taken strict action on a large cooperative bank. RBI located in Gujarat Color merchants co-operative bank The license has been canceled, due to which millions of customers of this bank are in danger of losing their money. Now what will happen to the money deposited of the customers of this bank has become a big question.
RBI Action: What happened?
The RBI has decided to cancel the license of the Color Merchants Co-operative Bank, as the bank had a shortage of deposited capital. As a result, the bank will not be able to do any banking work in the future and its customers may find it difficult to get the full amount back.
What will be the money of customers?
The RBI has said that now the registrar of the cooperative societies of Gujarat has been requested to close the bank and has been appointed as a solidator for the bank.
Customers will get back a sum of up to five lakh rupees under their deposit insurance and loan guarantee corporation (DICGC). Customers who had deposited less than Rs 5 lakh will get the entire amount back, while those who have more amount will get only five lakh rupees.
Return of money under DICGC
According to DICGC, about 98 percent of the customer account of the deposits in the bank is less than Rs 5 lakh. These customers will get the entire amount back, while the remaining 2 percent of the customers will get only Rs 5 lakh back, as this bank is under the rules of failure. Thus, they can lose a part of their deposits.
What did RBI say?
The RBI stated the reason for cancellation of this bank’s license, saying that the bank did not have enough capital and earnings possibilities, and its banking work could also be affected. The cooperative bank did not meet several conditions and requirements under the Banking Regulation Act.
What will happen now?
Now, after the cancellation of this cooperative bank’s license, this bank will not be able to operate any transaction or banking services. The closure of banking services will also affect the process of acceptance and repayment. The RBI believes that operating this bank could have negatively affected the common people, so this decision was taken.
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