RBI Cancelled Licence of Deccan Urban Co-operative Bank, Karnataka: The Reserve Bank of India(RBI) cancelled the licence of Deccan Urban Co-Operative Bank. Deccan Urban Co-operative Bank is a Vijayapur-based bank located in the state of Karnataka. The licence of Deccan Urban Co-operative Bank was cancelled by the Central Bank of India because the lender did not have enough amount of capital and earning prospects. To know the detailed information on the cancellation of the Licence of Deccan Urban Co-operative Bank by RBI and whether the depositors can get their money back go through the article discussed below.
Licence Cancelled of Deccan Urban Co-operative Bank by RBI
The Licence of Deccan Urban Co-operative Bank got cancelled by the RBI on the 18th of August 2022. Cancellation of licence means that the business of Deccan Urban Cooperative Bank got ceased. The RBI said that the bank does not have adequate capital and earning prospects. The Commissioner for Cooperation and Registrar of Cooperative Societies, Karnataka, has been appealed by the RBI to issue an order for winding up the bank. A liquidator will also be appointed by the Commissioner for Cooperation and Registrar of Cooperative Societies, Karnataka for the bank. A liquidator is a person who has the legal rights and they work on behalf of the company/bank to sell the assets of the bank before the bank gets closed. The assets are sold so that cash can be generated and that can be used for a variety of reasons including debt repayment.
The present financial condition of Deccan Urban Cooperative Bank, Karnataka is such that it will not be able to pay its depositors the complete deposited amount, as said by the RBI.
Will the depositors of Deccan Urban Co-operative Bank get their money back?
The depositors of Deccan Urban Co-operative Bank are worried after the licence of Deccan Urban Co-operative Bank got cancelled by the RBI. A question revolves in their mind that will they get their deposited money back. The Reserve Bank of India(RBI) said in a release that as per the data submitted by the bank more than 99 per cent of the depositors of Deccan Urban Co-operative Bank will receive their complete deposited amount from Deposit Insurance and Credit Guarantee Corporation (DICGC).
After the liquidation of Deccan Urban Co-operative Bank each and every depositor will be allowed to get deposit insurance claim amount for their deposits up to Rs 5 lakh. DICGC has paid Rs 13.07 crore of the total insured deposits till 6th August, 2022. In a release made by the RBI it is mentioned that the Central Bank has charged a penalty of Rs. 5,93,000 on Obopay Mobile Technology India Private Limited for disobeying certain provisions of norms on Prepaid Payment Instruments(PPI) and Know Your Customer(KYC). There were certain deficiencies in regulatory compliance for which the penalty is charged by the RBI and is not intended to pronounce upon the validity of any transaction or agreement entered into by the entity with its customers.
|Current Affairs April 2022|