The bank has been banned from doing ‘banking’ business with immediate effect.
The central bank of the country, or the Reserve Bank of India (RBI) said on Friday that it has canceled the license of the Imperial Urban Co-operative Bank in Jalandhar. This action was taken by the central bank because the bank does not have enough capital and earnings possibilities. According to PTI news, on liquidation (liquidation), every depositor will be entitled to receive the insurance claim amount on its deposit up to Rs 5 lakh from the deposit insurance and loan guarantee corporation i.e. DICGC. Registrar of cooperative societies of Punjab government has also been requested to issue an order to close the bank and appoint a liquidator for the bank.
97.79 percent depositors will be able to take full amount
According to the news, according to the data presented by the bank, RBI said that 97.79 percent depositors are entitled to receive the entire amount of their deposit from DICGC. That is, bank customers will be able to withdraw the amount. As of 31 January 2025, DICGC has already paid Rs 5.41 crore out of the total sum assured amount. Explaining the cancellation of the license of the Imperial Urban Co-operative Bank, the Reserve Bank said that the bank’s working further is harmful to the interests of its depositors.
Ban from doing ‘banking’ business
The RBI said that due to its current financial situation, the bank would be unable to make full payment to its depositors. He also said that if the bank is allowed to continue the banking business even further, it will adversely affect the public interest.
As a result of the license cancellation, the Imperial Urban Co-operative Bank has been banned from doing ‘banking’ business with immediate effect, including other things to accept the deposit and repay the deposit. The RBI periodically reviews these banks and takes strict steps when the flaw is found.
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