In one of the foremost shocking incident the Reserve Bank of India Bank of India has cancelled the license of Goa Based Madgaum Urban Cooperative Bank because of heavy financial irregularities and thus the bank are directed to stop all the banking business from 29th July 2021.
According to the reports, the Office of Registrar of Cooperative Societies, Goa, has also been requested to issue an order for completing the bank and appoint a liquidator for the bank.
Meanwhile the RBI has assured that 99 percent of the depositors will get their full amount of their deposits from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
“On liquidation, every depositor are getting to be entitled to receive deposit claim amount of his/her deposits up to a monetary ceiling of Rs 5,00,000 from the DICGC, subject to the provisions of the DICGC Act, 1961,” the RBI said.
The Reserve Bank of India Bank said it’s cancelled the licence of the bank because it doesn’t have adequate capital and earning prospects. As per the RBI, the continuance of the bank is prejudicial to the interests of its depositors, which the bank with its present financial position, would be unable to pay its present depositors fully .
The RBI also said public interest would be adversely affected if it’s allowed to carry on its banking business any more .
“As such, it doesn’t suits the provisions of section 11(1) and section 22 (3) (d) read with section 56 of the Banking Regulation Act, 1949,” an RBI statement said.
The bank is now prohibited from conducting the business of ‘banking’, which includes acceptance of deposits and repayment of deposits, the RBI said.
“With the cancellation of licence and commencement of liquidation proceedings, the method of paying the depositors of The Madgaum Urban Co-operative Bank Limited, Margao, Goa as per the DICGC Act, 1961 are getting to be set in motion,” it said.
With the RBI action against Madgaum Urban Co-operative Bank, method to return the cash of depositors are getting to be set in motion. As per the data submitted by the bank, about 99 per cent of the depositors will receive full amounts of their deposits froDeposit Insurance and Credit Guarantee Corporation (DICGC), RBI clarified.