RBI cancels licence of United Co-operative Bank, what will happen to its customer

New Delhi: RBI Cancel License: The Reserve Bank of India (RBI) has canceled the license of United Co-Operative Bank Limited. In view of the poor financial condition of this bank present in Bagnan, West Bengal, RBI has taken this step.

United Co-Operative Bank's license canceled

United Co-Operative Bank Ltd from 13 May 2021 only after the cancellation of license. All types of banking activities have been banned in India. The RBI said that the registrar of the Co-operative Societies of West Bengal had also appealed to close the bank and appoint a liquidator. With this step of RBI, the co-operative bank depositors are now worried about what will happen to their money deposited in the bank, whether they will get the money back or not.

What will happen to customers' money?

RBI says that the bank does not have sufficient capital nor does it have any hope of earning in future. As far as the bank's customers are concerned, all the depositors of the bank will be refunded the entire deposit amount through Deposit Insurance and Credit Guarantee Corporation (DICGC). According to the data provided by the bank about the customers, the entire amount will be returned to all depositors. However as per central rules, a maximum limit of up to Rs 5 lakh will also be followed. The Reserve Bank also took action against United Co-Operative Bank Ltd on 18 July 2018. The RBI then banned many services, including investment, loaning, renewal of the scheme, to the bank without written permission.

RBI said, that's why the ban

The Reserve Bank stated that this bank was not fulfilling certain provisions of the Banking Regulation Act, 1949 (Banking Regulation Act, 1949). The Reserve Bank said that the financial position of the bank will be unable to pay its depositors in full. If the bank continues its operations, it will be against the interests of the customers. Keeping this in mind, it has been decided to cancel the license of the bank. All activities of the bank have been banned with immediate effect.

What is deposit insurance

When a bank sinks or its financial condition worsens, its depositors are protected to a certain extent to a certain extent, a rule under which this is called deposit insurance. Deposit insurance is a type of protection cover. It is available to the depositors of the bank. All types of bank deposits are covered under DICGC. These include savings, fixed deposits, current accounts and recurring deposits (RD).

Up to 5 lakh rupees will be refunded

Its limit is up to 5 lakh rupees. This means that up to Rs 5 lakh deposits of customers in the bank are safe. Even if your total deposit in one of the banks is more than Rs 5 lakh, then you will get a cover of only Rs 5 lakh. That is, in case of drowning of the bank or cancellation of the license, the amount of up to Rs 5 lakh will be returned to the customer. Whether the amount deposited in the bank is less than 5 lakh rupees or more.