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RBI Cancel Banking License: The Reserve Bank of India has canceled the license of a cooperative bank for non-compliance of banking rules. RBI has canceled the banking license of Kerala based Adoor Co-operative Urban Bank. However, it is allowed to operate as a Non-Banking Finance Company (NBFC) by the central bank.
Let us tell you that on Monday, RBI has imposed a fine of lakhs on 4 cooperative banks for violating different rules. These include Tamil Nadu State Apex Co-operative Bank, Bombay Mercantile Co-operative Bank, Janata Sahakari Bank and Baran Nagarik Sahakari Bank. A fine of Rs 44 lakh has been imposed on these banks.
License canceled on 24 April 2023
According to the notification issued by RBI, the cancellation of the bank’s license has become effective from the close of business on April 24, 2023. The Adoor Co-operative Urban Bank Limited was granted a banking license by the RBI under the Banking Regulation Act on January 3, 1987 to conduct banking business in India. The notification for cancellation of the bank’s license has become effective from the close of business on April 24, 2023.
What will happen to depositors’ money?
Account holders of Adoor Co-operative Urban Bank will get the benefit of insurance cover on deposits up to Rs 5 lakh. This insurance is available from the Insurance and Credit Guarantee Corporation (DICGC). DICGC is a subsidiary of the Reserve Bank, providing financial protection to the customers of co-operative banks.
Customers with deposits of Rs 5 lakh or less in Adoor Co-operative Urban Bank will get full claim from DICGC. But customers who have more than Rs 5 lakh deposited in their account will not be able to get the full amount.
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