NEW DELHI-The Reserve Bank of India [RBI] in August announced that it had withdrawn the Pune-based Rupee Cooperative Bank’s banking licence and asked the Registrar of Cooperative Societies to liquidate it. The bank ceased to carry on banking business effective September 22, 2022.
According to RBI, Rupee Cooperative Bank did not have adequate capital and earning prospects. As such, it could not comply with the provisions of Section 11[1] and Section 22 [3] [d] read with Section 56 of the Banking Regulation Act, 1949.
The bank failed to comply with the requirements of Sections 22[3] [a], 22 [3] [b], 22[3][c], 22[3] (d) and 22[3][e] read with Section 56 of the Banking Regulation Act, 1949;
In closing the bank, RBI also reasoned that its continuance would be prejudicial to the interests of its depositors.
“The bank with its present financial position would be unable to pay its present depositors in full, and public interest would be adversely affected if the bank is allowed to carry on its banking business any further.”
What will happen to depositors’ money at Rupee Co-operative Bank Ltd?
According to the RBI press release dated August 10, 2022, “On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 500,000 [US$ 6153.43] from Deposit Insurance and Credit Guarantee Corporation [DICGC] subject to the provisions of DICGC Act, 1961.
As per the data submitted by the bank, more than 99 percent of the depositors are entitled to receive full amount of their deposits from DICGC. As on May 18, 2022, DICGC has already paid Rs 700.44 [US$ 8.62] crore of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961 based on the willingness received from the concerned depositors of the bank.”
What happens after cancellation of the bank’s lisence?
“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 as defined in Section 5[b] read with Section 56 of the Banking Regulation Act, 1949 with effect from September 22, 2022,” the release added.
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