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Rupee Co-operative Bank to stop banking business from Sept 22; here’s how much depositors will get

The Reserve Bank of India said that upon liquidation every depositor of Rupee Co-operative would be entitled to an insurance claim of up to Rs 5 lakh in accordance with the provisions of the Deposit Insurance and Credit Guarantee Corporation Act (DICGC). DICGC has already paid Rs 700.44 crore of the total insured deposits.

ET Now Digital

Updated Aug 11, 2022, 08:41 IST

New Delhi: The Reserve Bank of India on Wednesday cancelled the licence of the Rupee Co-operative Bank as the lender does not have adequate capital, earning prospects and it does not comply with regulations. The Pune-based bank will cease to exist as a bank from September 22.

Announcing its decision, the central bank said that the continuance of the bank 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, the RBI said adding that public interest would be adversely affected if the bank is allowed to carry on its banking business.

"Consequent to the cancellation of its licence, 'Rupee Co-operative Bank Ltd, Pune' stands prohibited from conducting the business of ‘banking’ which includes, among other things, acceptance of deposits and repayment of deposits as defined in Section 5(b) read with Section 56 of the Banking Regulation Act, 1949 with effect from September 22, 2022," the RBI said in a release.

The bank further noted that upon liquidation every depositor of Rupee Co-operative would be entitled to an insurance claim of up to Rs 5 lakh in accordance with the provisions of the Deposit Insurance and Credit Guarantee Corporation Act (DICGC).

“As per the data submitted by the bank, more than 99 per cent of the depositors are entitled to receive full amount of their deposits from DICGC. As on May 18, 2022, DICGC has already paid Rs 700.44 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961 based on the willingness received from the concerned depositors of the bank,” the RBI added.

Many of the lender’s high value depositors are senior citizens.

It must be noted that the RBI had in December last year given the Pune-based lender an extension for its banking licence for three months. It was the 27th such extension for the company.

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