The Reserve Bank canceled the license of the bank as follows:
i) The bank does not have sufficient capital and earning potential. Thus, 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.
ii) Banks Section 22(3)(a), 22(3)(b), 22(3)(c), 22(3)(d) and 22(3)(e) of the Banking Regulation Act, 1949 read with 56;
iii) the continuance of the bank is prejudicial to the interests of its depositors;
iv) the bank will be unable to make full payments to its existing depositors with its current financial position; And
v) If the bank is allowed to carry on its banking business further, public interest will be adversely affected.
What will happen to depositors’ money in Rupee Sahakari Bank Ltd.?
As per RBI’s press release dated August 10, 2022, “On liquidation, every depositor shall be entitled to receive a deposit insurance claim amount of his deposits up to Rs 5,00,000/- (Rupees five lakh only). Subject to the provisions of Deposit Insurance and Credit Guarantee Corporation (DICGC) DICGC Act, 1961. As per the data furnished by the bank, more than 99% of the depositors are entitled to receive the full amount of their deposits from DICGC. As on May 18, 2022, DICGC has already paid Rs.700.44 crore of the total Sum Assured under the provisions of Section 18A of the DICGC Act, 1961 based on the will received from the concerned depositors of the Bank.
What happens after the bank’s license is canceled?
“Consequent to the cancellation of its licence, “Rupee Sahakari Bank Ltd., Pune” is prohibited from carrying on the business of “Banking” which shall, inter alia, include, among other things, the acceptance of deposits and the 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 release said.
What does DICGC insure?
DICGC insures all deposits like savings, fixed, current, recurring, etc. deposits except the following types of deposits:
(i) Deposits of foreign governments
(ii) State/Central Government Deposits
(iii) Inter-Bank Deposits
(iv) Certificate of Deposit
(v) Deposits of State Land Development Banks with State Co-operative Banks
(vi) Deposits taken as cash collateral
(vii) deposits made by transferring subordinate liabilities at least 6 months before the bank’s failure or moratorium, whichever is earlier, and
(viii) Deposits abroad.
How are claims settled by DICGC?
According to the DICGC FAQ page, “If a bank goes into liquidation, DICGC is liable to pay each depositor through the liquidator, a maximum of five dues after exercising the appropriate set-off admissible amount up to Rs. Lakhs, if any, and amalgamation of deposits in equal capacity and equal authority. After scrutiny of the main claim list submitted by the liquidator, the claim amount admissible by the Corporation is computed. If the liquidated bank has If Liquid Funds are available, they are advised to make payments out of Liquid Funds to eligible depositors as per DICGC Act, 1961 and no amount is released by DICGC. However, in case of partial or non-availability of Liquid Funds, Partial or full payment, as applicable, is released by DICGC.The amount paid by the Liquidator from the Liquid Fund is counted as the fund release by DICGC and the simultaneous repayment received by the Corporation from the Bank.
What is the cut off date and what is its importance?
The date of registration of a bank as an insured bank is the cut-off date. The claim amount (including interest) payable to each depositor is to be prepared depositor-wise as on the cut-off date, after set-off of loans and advances and adding the deposits to ‘Equal Capacity and Equal Rights’.
What are the requirements for preparing a list of claims?
The claim list is prepared after proper set-off of depositor-wise dues, if any, and aggregating deposits in equal capacity and equal rights etc. Please see the link ‘Guidelines for Liquidators’.
What is the time limit allowed for preparation of the list of claims by the liquidator?
The statutory requirement is that after the appointment of the liquidator, he should submit the claim list in the form and manner prescribed by the DICGC, with the least possible delay and under no circumstances within 3 months from the date of taking over as the liquidator. needed.