RBI canceled the license of this cooperative bank, now know what will happen to customers’ money?

People’s Co-operative Bank Limited has suffered a major setback in Uttar Pradesh. Actually, the Reserve Bank of India (RBI) has canceled the license of the bank. The central bank has given this information on Monday. RBI said that now the bank will stop doing banking business with effect from March 21, 2022.

Why was the license canceled?

The central bank said, “The Commissioner of Cooperatives and Registrar of Cooperative Societies, Uttar Pradesh have also been requested to issue an order to close the bank and appoint a liquidator for the bank. The license was canceled because the bank did not have enough capital and earning potential.”

Net profit of ₹235 crore

The Reserve Bank defended that with its current financial position, the bank would be unable to make full payments to its existing depositors and public interest would be adversely affected if the bank is allowed to carry on with its banking business.

5 lakh will be given to customers

It is worth noting that the security of deposits up to Rs 5 lakh in banks is guaranteed by the Deposit Insurance and Credit Guarantee Corporation. DICGC, a subsidiary owned by the Reserve Bank of India, provides insurance cover on bank deposits. As per the provisions of deposit insurance of 5 lakhs, in case of bank insolvency or cancellation of its license, an amount of up to Rs 5 lakh is paid to the depositor, irrespective of the amount deposited in the bank.