The Reserve Bank of India (RBI) regulates all the banks across the country. Whenever a bank violates banking rules, RBI takes strict action. There are penalties on some and restrictions on others. In May, the Central Bank has canceled the licenses of 2 banks. A ban has been imposed on a bank, which will be applicable for 6 months. RBI will keep reviewing the situation regularly. Monetary penalty has been imposed on 11 others. However, this will not affect the customers.
In view of the liquidity position of Nagar Sahakari Bank Limited, Etawah, RBI has issued an order to close the business from May 18, which will be applicable for 6 months. During this period, customers will be allowed to withdraw only Rs 10,000 from the account. The situation of the bank will also be reviewed regularly. If there is any improvement, changes will also be made in the instructions.
The license of Sarvodaya Co-operative Bank Limited, based in Mumbai, has been cancelled. RBI had ordered closure of banking business from May 12. The license of The Yashwant Co-operative Bank Limited Phaltan Maharashtra has been cancelled. This bank has been instructed to close banking business from May 19. These banks do not have sufficient capital and earning potential. Its condition is so bad that it cannot even pay the full amount to its depositors. After the license is cancelled, the bank will not be allowed to accept deposits and make refunds of deposits.
Security will also be ensured for the depositors of banks whose licenses have been canceled or banned. Under the provisions of the DICGC Act 1961, every depositor will be entitled to receive deposit insurance claim amount up to a limit of Rs 5 lakh on his deposits from the Deposit Insurance and Credit Guarantee Corporation.
