The RBI on Thursday cancelled the licence of The Madgaum Urban Co-operative Bank Limited, Margao, Goa, because the financial institution with its present monetary place could be unable to pay its current depositors in full.
The RBI additional mentioned that as per the information submitted by the financial institution, about 99 per cent of the depositors will obtain full quantities of their deposits from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
The Office of Registrar of Cooperative Societies, Goa, has additionally been requested to problem an order for winding up the financial institution and appoint a liquidator for the financial institution, the RBI added.
The Madgaum Urban Cooperative Bank, the RBI mentioned, doesn’t have ample capital and incomes prospects and has didn’t comply with varied provisions of the Banking Regulation Act, 1949.
Further, “the bank with its present financial position would be unable to pay its present depositors in full; and public interest would be adversely affected if the bank is allowed to carry on its banking business any further”, it mentioned whereas cancelling the licence.
“Consequent to the cancellation of its licence, The Madgaum Urban Co-operative Bank Limited, Margao, Goa is prohibited from conducting the business of ‘banking’ which includes acceptance of deposits and repayment of deposits…With immediate effect,” the RBI mentioned.
With the cancellation of licence and graduation of liquidation proceedings, the method of paying the depositors will be set in movement.Â
Will financial institution investors get their a refund?Â
On liquidation, each depositor could be entitled to obtain deposit insurance coverage declare quantity of his/her deposits as much as a financial ceiling of Rs 5 lakh solely from the DICGC.
