Bank alert! RBI cancels license of THIS bank, here’s what will happen to depositors

The Reserve Bank of India has cancelled the license of Bagnan, United Co-operative Bank Ltd, West Bengal. The Central bank has taken the decision after it found that the bank doesn’t have adequate capital and earning prospects, RBI said in an order dated May 10, 2021. 

Depositors don’t need to worry much, as they will receive the full amount of their deposits, thanks to the Deposit Insurance and Credit Guarantee Corporation (DICGC). However, depositors are entitled to receive claim benefits of up to Rs 5 lakh.

RBI said that in the current situation, the bank would not be able to pay its depositors the full amount of their deposits. The process of liquidation will now being. 

The bank is now prohibited from conducting the business of ‘banking’ which includes acceptance of deposits and repayment of deposits. “The continuance of the bank is prejudicial to the interests of its depositors,” RBI said. 

“The Registrar of Cooperative Societies, West  Bengal has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank,” RBI said in its official statement published on Thursday, May 13. "Public interest would be adversely affected if the bank is allowed to carry on its banking business any further" RBI added.