License Cancelled: The Reserve Bank of India (RBI) has canceled the license of Karnataka-based Karwar Urban Co-operative Bank. 92.9 percent of the bank’s customers are entitled to receive the full amount of their deposits from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
License Cancelled: The Reserve Bank of India (RBI) has canceled the license of Karnataka-based Karwar Urban Co-operative Bank as it does not have sufficient capital and earning prospects. With this, the bank will stop banking activity from the close of business on 23 July 2025. At the same time, the central Reserve Bank said in the statement that the Registrar of Cooperative Societies, Karnataka has also been requested to issue an order to close the bank and appoint a liquidator for the bank.
What will happen to the customers?
On liquidation, every depositor will be entitled to receive the deposit insurance claim amount of his deposits up to the limit of Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC). RBI said that as per the data submitted by the bank, 92.9 percent of the depositors are entitled to receive the full amount of their deposits from DICGC. Let us tell you that DICGC has paid Rs 37.79 crore out of the total insured deposits till June 30, 2025. RBI said that the cooperative society does not have adequate capital and earning prospects.
Advice given to urban cooperative banks
Let us tell you that recently Reserve Bank of India Deputy Governor Swaminathan J. asked the directors of urban cooperative banks (UCBs) to focus on improving functioning and risk management and adopting safe technology. He said, “The functioning of banks must be even better. Understand and manage risks better. Technology must be adopted thoughtfully and safely. Most importantly, the trust of your depositors must be unwavering.
Swaminathan said urban cooperative banks represent a model that is based not just on profits, but on purpose. The deputy governor said it reflects the essence of the cooperative model which is based on banking relationships, local knowledge and grassroots engagement.
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