Restriction: After the license has been cancelled, the bank is prohibited from acceptance of deposits and repayment of deposits.
Paying the depositors (as per the provisions of the DICGC Act, 1961):
- More than 98 per cent of the depositors of the Bhagyodaya Friends UCB will receive the full amounts of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC).
- After Liquidation, every depositor would receive a deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5 lakh from the DICGC.
What is Liquidation?
It is the process of converting a company’s assets into cash and using those funds to repay, as much as possible, the company’s debts.
Recent Related News:
On January 28, 2021, RBI cancelled the license of Shivam Sahakari Bank Ltd, a co-operative bank in Ichalkaranji, Kolhapur, and Maharashtra. The bank will stop carrying on the banking business, which includes accepting and repaying deposits.
About Reserve Bank of India (RBI):
Establishment – 1st April 1935
Headquarters – Mumbai, Maharashtra
Governor – Shaktikanta Das
Deputy Governors – Mahesh Kumar Jain, Michael Debabrata Patra, and M Rajeshwar Rao