New Delhi: The Reserve Bank of India (RBI) has informed on Thursday that the license of Subhadra local area bank in Kolhapur has been licensed. In view of the malfunctions in the operation of this bank, RBI has taken this decision. RBI has canceled the license of this bank under section 22, 4 of the Banking Regulation Act, 1949. Giving detailed information about this case, RBI said that many such works were being done in Subhadra Bank which was not suitable for the present and future of the depositors. In such a situation, the public can be harmed by continuing this bank.
Ban on doing banking and other business
The RBI also canceled the license of Maharashtra’s troubled Karad Bank (Karad Janta Sahakari Bank) this month. Now with regard to Subhadra Bank, the central bank says that in the last two quarters of the last financial year, this bank has violated the terms of minimum net worth. This bank does not have sufficient capital to return to depositors. Now after the cancellation of the license, this bank cannot do any kind of banking or other business.
The bank has enough capital to return the money to the depositors
RBI said that given the functioning of the management of this bank, it can be said that the present and future of the depositors will be adversely affected. After canceling the license, RBI will now put an application in the High Court. However, RBI also said that presently Subhadra Local Area Bank has sufficient capital to pay all the depositors.
Depositors will get back up to Rs 5 lakh
Explain that during the closure of any bank, there is a provision to give back all the capital of the bank to their depositors. The Deposit Insurance and Credit Guarantee Corporation (DICGC) ensures this. According to DICGC rules, this limit is only up to Rs 5 lakh. This means that depositors can get a maximum of Rs 5 lakh back after the bank is closed. RBI says that 99 percent of the depositors of Karad Bank will get their full money back.
