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RBI cancels license of Karad Janata Sahakari Bank, customers will get back up to Rs 5 lakh

The Reserve Bank of India -RBI has dealt a major blow to a cooperative bank in Maharashtra. RBI has canceled the license of Karad Janata Sahakari Bank. It states that the bank does not have adequate finance. This means that the bank does not have the right to make any deposit. With the cancellation of the license, now this bank will not be able to do business in future.

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The Central Bank has also requested the Registrar of Cooperative Societies and the Commissioner of Co-operatives of Maharashtra to issue an order to close the bank and appoint a liquidator.

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However RBI has stated that a common procedure will be adopted for depositors of the bank for payment of their deposits. Under which every depositor of the bank will be paid up to 5 lakh rupees under the prescribed terms and conditions. This payment will be done by Insurance and Credit Guarantee Corporation. Under this process, 99 percent of the bank’s depositors will get their full deposits back.

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RBI has said in a notice issued on Tuesday that the bank does not have sufficient capital and earning potential. Hence it will not be able to return the entire money of its existing depositors. In such a situation, if the bank is allowed to do further business, then its public interest will be affected.

Abhishek Sharma

Abhishek Sharma is a well versed content writer and loves to write on different niche category domains with the motive of increasing the client's business and high engagement on the articles

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