License of Lakshmi Co-operative Bank canceled, now how will customers get back their deposits?

The Reserve Bank of India (RBI) on Thursday canceled the license of The Lakshmi Co-operative Bank based in Maharashtra.

The Reserve Bank of India (RBI) on Thursday canceled the license of The Lakshmi Co-operative Bank based in Maharashtra. The reason behind this has been attributed by the central bank to lack of adequate capital. On liquidation, every depositor will be able to get a deposit insurance claim amount up to Rs 5 lakh. According to RBI, the bank will not be able to make payments to its depositors in its current financial position. The central bank said that if the bank is allowed to work further, which will adversely affect the interest of the people.

RBI said in a statement that the Reserve Bank has canceled the license of the bank, as the lender does not have sufficient capital. And the expectation of earning and further functioning of the bank is in the interest of the depositors.

The central bank said that on liquidation, every depositor will receive a deposit amount up to a monetary limit of Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC). This will be under the DICGC Act, 1961.

Earlier, the Reserve Bank of India (RBI) has imposed a fine on 8 co-operative banks simultaneously last month. There is also a bank Visakhapatnam Co-operative Bank on which RBI has imposed a fine of Rs 55 lakh. All these banks are accused of laxity in rules and not following the instructions. The Reserve Bank keeps on taking such action from time to time and warns the banks about the guidelines given. Actually, the Reserve Bank has made rules under the Banking Regulation, which are required to be followed in any case. If this is not the case, the Reserve Bank takes action.

How to get back customers’ money

The deposit amount of customers in the bank will now be available through Insurance and Credit Guarantee Corporation. According to the Reserve Bank, after liquidation, every depositor will be able to get a claim under insurance on his deposit up to the limit of Rs 5 lakh. However, for this the depositors will have to apply to get the money back. According to the Reserve Bank, according to the bank’s data, 95 percent of the depositors’ deposits are within this claim range. In this case, they will get their full amount back.