The Reserve Bank of India (RBI) has recently cancelled the license of Banaras Merchantile Co-operative Bank, one of the country’s well-known cooperative banks. The decision was made because the bank violated RBI rules and was not in a strong financial position.
This closure has created concerns among customers about the safety of their money and how much they can claim under the insurance system.
Reason Behind the Closure
RBI stated that the bank had a weak financial status and insufficient capital to continue operations. The bank could not earn enough income to meet its obligations to depositors.
Due to this, RBI decided to cancel its license to protect the interests of depositors and maintain trust in the banking system.
How Much Money Can Depositors Claim
According to RBI and DICGC (Deposit Insurance and Credit Guarantee Corporation) guidelines:
- Customers can claim up to ₹5 lakh for their deposits.
- Any amount above ₹5 lakh may not be fully refunded.
This ensures that most depositors can recover a significant portion of their savings, though large account holders may face losses.
Steps for Depositors to Claim Their Money
If you are a depositor of Banaras Merchantile Co-operative Bank, you should:
- Check your name in the official DICGC list of eligible depositors.
- Submit a claim with required documents such as passbook, bank statements, and ID proof.
- Keep all records ready to ensure smooth processing of your claim.
Authorities in Uttar Pradesh and cooperative commissioners have asked banks and media outlets to inform customers about the claims process.
Impact on Customers and Public Awareness
This bank closure highlights the risks of storing money in banks that do not follow RBI regulations. While cooperative banks are popular, depositors must stay aware of the bank’s financial health. RBI’s action is meant to protect the banking system and minimize losses for depositors as much as possible.
Conclusion
The closure of Banaras Merchantile Co-operative Bank is a reminder of the importance of financial stability and regulatory compliance in banks. Depositors can claim up to ₹5 lakh under DICGC insurance rules, but amounts above this may be at risk. Customers are advised to stay informed, check their accounts, and submit claims promptly to safeguard their savings.
FAQs
Which bank’s license was cancelled by RBI?
The license of Banaras Merchantile Co-operative Bank was cancelled due to weak financial health.
How much money can depositors claim?
Depositors can claim up to ₹5 lakh under DICGC insurance.
What happens if my deposit is more than ₹5 lakh?
Any amount above ₹5 lakh may not be fully refunded by DICGC.
How can depositors claim their money?
Depositors need to submit claims to DICGC with their passbook, account statements, and ID proof.
Why did RBI cancel the bank’s license?
RBI cancelled the license because the bank violated regulatory norms and had insufficient capital to continue operations.