BackDepositors of this bank will be left with ₹5 lakh, no matter how much they had in their account
Starting from September 22, 110 years after it started operation, the bank is no longer allowed to engage in banking activities.
PremiumThe Reserve Bank of India (RBI) cancelled the licence of Rupee Co-operative Bank (RCB) Pune in August. In compliance with the High Court of Bombay order in September 2017, the order shall become effective September 22, which means the bank will cease to carry on banking services.
Due to the termination of its licence, 110 years after it started operation, the bank is no longer allowed to engage in banking activities, including accepting deposits and returning deposits, among others.
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The decision to revoke the licence disappointed the depositors, especially around 4,000 high-value depositors, including senior citizens, who owned almost ₹340 crore in deposits. No matter how much money they have in the bank overall, high-value depositors would only be reimbursed up to ₹5 lakh, according to the RBI.
The Bombay High Court declined to provide investors any relief despite the efforts of the RCB employee federations to prevent the financial institution from closing, including legal applications and administrative appeals. When Finance Minister Nirmala Sitharaman visited Pune earlier, RCB investors requested her to intervene. She said that she would “look into the matter".
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The Reserve Bank cancelled the licence of the bank in August as the bank did not have adequate capital and earning prospects and did not comply with certain provisions of the Banking Regulation Act, 1949.
The RBI believed that the bank's continued existence would be detrimental to the interests of its depositors. According to the RBI, the bank wouldn't be able to fully reimburse its current depositors given its current financial situation. It further stated that allowing the bank to continue operating its banking business would be detrimental to the public interest.
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The writings of the late Lokmanya Tilak inspired the bank's administration when it was first established to create it as a cooperative organisation. The late Govindrao Dharap, late Keshavrao Doke, and late Kalurambhau Naik were the founding members. The bank acquired scheduled status in 1988 and commemorated its platinum jubilee from 1986 to 1987.
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