Madgaum Urban Co-op Bank Ltd: The Reserve Bank of India (RBI) canceled the license of Madgaum Urban Cooperative Bank Co., Ltd., located in Margao, Goa.
Note: RBI imposed the penalty in the exercise of power under Section 47 A (1) (c) read with section 46 (4) (i) of the BR Act, 1969.
Why was the license canceled?
- The license was canceled because the bank with its current financial position would be unable to pay its present depositors in full.
- The bank does not have adequate capital and earning prospects.
- As such, it does not comply with the provisions of section 11(1) and section 22 (3) (d) read with section 56 of the Banking Regulation Act, 1949.
- The bank has also failed to comply with the requirements of sections 22(3) (a), 22 (3) (b), 22(3)(c), 22(3) (d), and 22(3)(e) read with section 56 of the Banking Regulation Act, 1949.
RBI action against Madgaum Urban Co-operative Bank:
- The RBI stated that, as per the data submitted by the bank, approximately 99% of the depositors will receive full amounts of their deposits from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
- At the time of liquidation, every depositor has the right to receive a deposit insurance claim amount from their deposits, up to a maximum limit of 500,000 rupees, only from DICGC subject to the provisions of the DICGC Act, 1961.
- RBI has also asked the Office of Registrar of Cooperative Societies, Goa, to issue a liquidation order and appoint a liquidator for the bank.
- With the cancellation of the license and the beginning of the liquidation process, the payment process to the depositors will soon begin.
- The bank ceases to carry on banking business with effect from the close of business on July 29, 2021.
- It refers to the Reserve Bank of India.
- The RBI is India’s central bank, which controls the issue and supply of the Indian rupee.
- It carries out India’s monetary policy and exercises supervision and control over banks and non-banking finance companies in India.
- RBI was set up in 1935 under the Reserve Bank of India Act,1934.
- It was nationalized in 1949.
- It is headquartered in Mumbai.
- Note: It was first headquartered in Kolkata, West Bengal
- RBI plays an important part in the Development Strategy of the Government of India.
- The current Governor of RBI is Shaktikanta Das.