THIS bank will be shutting down from tomorrow; what will happen to depositor’s money?

New Delhi: Pune-based Rupee Co-operative Bank Ltd will cease to carry on banking business, with effect from September 22, 2022, six weeks after the Reserve Bank of India cancelled its licence

On August 10, the RBI had cancelled the licence of Rupee Co-operative Bank Ltd as the lender did not have adequate capital and earning prospects. However, the RBI said that in compliance to an order of the High Court of Bombay, its direction will become effective after six weeks i.e, from August 10 onwards.

"Consequently, the bank will cease to carry on banking business, with effect from September 22, 2022," RBI had said.

What will happen to Rupee Co-operative Bank Ltd depositor’s money?

As per the data submitted by the cooperative bank, more than 99 per cent of the depositors are entitled to receive full amount of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC).

As of May 18, 2022, DICGC has already paid Rs 700.44 crore of the total insured deposits.

The Reserve Bank further said the Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank.

The licence has been cancelled because the bank does not have adequate capital and earning prospects and as such, it does not comply with certain provisions of the Banking Regulation Act, 1949.

"The bank with its present financial position would be unable to pay its present depositors in full," the RBI said, and added the continuance of the bank is prejudicial to the interests of its depositors.

Consequent to the cancellation of its licence, 'Rupee Co-operative Bank Ltd, Pune' stands prohibited from conducting the business of banking which includes, among other things, acceptance of deposits and repayment of deposits with effect from September 22, 2022, it said.

On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to Rs 5 lakh from DICGC.

With PTI Inputs