Due to insufficient capital and earning potential, the RBI on Tuesday revoked the licenses of two cooperative banks: Sri Sharada Mahila Co-operative Bank in Tumkur, Karnataka, and Harihareshwar Sahakari Bank in Wai, Satara. The Reserve Bank of India (RBI) said in a statement that Harihareshwar Sahakari Bank will stop conducting banking operations as of the close of business on July 11, 2023.The Deposit Insurance and Credit Guarantee Corporation (DICGC) is obligated to pay the full amount of deposits made by about 99.96% of Harihareshwar Sahakari Bank’s depositors.About 97.82% of depositors at Sri Sharada Mahila Co-operative Bank are eligible to collect the entire value of their savings via Deposit Insurance and Credit Guarantee Corporation (DICGC).Approximately 97.82% of the depositors of Sri Sharada Mahila Co-operative Bank are eligible to collect the entire value of their savings from the Deposit Insurance and Credit Guarantee Corporation (DICGC).Every depositor would be eligible to receive a deposit insurance claim payment from DICGC of up to Rs 5 lakh upon liquidation.

              Following the revocation of their licenses, banks are no longer allowed to engage in the activity known as “banking,” which involves, among other things, accepting deposits and returning deposits.The RBI revoked the license because cooperative banks lacked sufficient capital and future earnings potential.Additionally, it continued, the institutions’ current financial situation would prevent them from fully repaying their current depositors.Of the bank’s entire insured deposits, the DICGC has already paid out Rs. 57.24 crore as of March 8, 2023.As of June 12, 2023, DICGC had already reimbursed Sri Sharada Mahila Co-operative Bank depositors Rs 15.06 crore of the entire protected deposits.According to the RBI, an order to wound up the bank and name a liquidator have also been requested from the Commissioner for Cooperatives and Registrar of Cooperative Societies in Maharashtra.

 

 

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