RBI scraps licence of MP-based Garha Co-operative Bank: The licence of Madhya Pradesh’s Garha Co-operative Bank, Guna, was withdrawn by the Central Bank of India (RBI) due to insufficient capital and earning potential. According to a statement from the RBI, approximately 98.4% of the depositors of the cooperative bank are eligible to receive the full value of their savings from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
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RBI scraps licence of MP-based Garha Co-operative Bank: Key Points
The bank is immediately forbidden from carrying out a number of activities, including accepting deposits and repaying deposits, as a result of the termination of its licence. According to the RBI, the bank lacked sufficient capital and earning potential, which revoked the licence with effect as of Monday’s end of business hours. Furthermore, it stated that given its current financial situation, Garha Co-operative Bank would be unable to fully reimburse its depositors.
What will happen to the depositors?
Upon liquidation, each depositor would be eligible to collect from DICGC the deposit insurance claim amount of his or her deposits, up to a maximum financial limit of Rs 5,00,000.DICGC has already paid out Rs 12.37 crore of the total protected deposits as of December 19, 2022, depending on the consent given by the relevant bank depositors.