RBI Cancels License of Banaras Merchantile Co-op Bank

Mumbai, Jul 4 (PTI) The RBI has cancelled the licence of Banaras Merchantile Co-operative Bank, Varanasi in the wake of its worsening financial position.

"Consequently, the bank ceases to carry on banking business, with effect from the close of business on July 04, 2024," the Reserve Bank of India said while cancelling the licence.

The Commissioner for Cooperation and Registrar of Cooperative Societies, Uttar Pradesh has also been requested to issue an order for winding up the bank and appoint a liquidator.

As per the data submitted by the bank, 99.98 per cent of the depositors are entitled to receive full amount of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC), the RBI said.

On liquidation, every depositor would be entitled to receive a deposit insurance claim amount of his/her deposits up to Rs 5 lakh from DICGC.

Giving details, the RBI said the cooperative bank does not have adequate capital and earning prospects, and its continuance is prejudicial to the interests of its depositors.

"The bank with its present financial position would be unable to pay its present depositors in full," it said.

As on April 30, DICGC has already paid Rs 4.25 crore of the total insured deposits under the provisions of the DICGC Act based on the willingness received from the concerned depositors of the bank.