RBI: The Reserve Bank of India (RBI) has canceled the license of Rupee Co-Operative Bank Limited located in Pune. Let us know what will be the effect on the customers of the bank after this decision of RBI.
Rupee Co-operative Bank: Reserve Bank of India (RBI) has canceled the license of Rupee Co-operative Bank Limited located in Pune. The RBI has taken this action in compliance with the Bombay High Court’s order dated September 12, 2017. This order will come into effect after six weeks from today i.e. from 22 September 2022. RBI said that if Rupee Co-Operative Bank Pune was allowed to expand banking business, it could have harmed the public interest.
Decision due to bad financial condition
Due to bad financial condition, this bank is unable to return the amount to its depositors. RBI said that out of the amount deposited in the bank, customers will get back only a maximum of Rs 5 lakh.
RBI imposed restrictions
RBI said that the bank will stop doing banking business after six weeks from today. RBI said that the bank will be prohibited from conducting the business of ‘banking’. With the implementation of this restriction, money will neither be able to be deposited nor withdrawn in the bank.
Action taken in these sections
The Reserve Bank said that the banking license of Rupee Co-Operative Bank has been canceled as the bank does not have sufficient capital and earning potential. It does not comply with the provisions of Section 11(1) and Section 22(3)(d) of the Banking Regulation Act, 1949 as well as Section 56. The bank has failed to comply with the requirements of sections 22(3)(a), 22(3)(b), 22(3)(c), 22(3)(d) and 22(3)(e) .