RBI Action on Banks: According to the Reserve Bank, Karwar Urban Co-operative Bank neither had sufficient capital left nor any possibility of good earnings in the future. In such a situation, RBI cancelled the license of the bank.
If you or someone you know has a bank account in a small cooperative bank, then this news is very important for you. The Reserve Bank of India (RBI) has canceled the license of Karnataka’s Karwar Urban Co-operative Bank. This means that now this bank will not be able to do any kind of banking business and its operations will be completely closed from July 23, 2025.
This decision will affect hundreds of account holders. However, there is no need to panic, because the insurance of your deposited amount is already fixed. In this news, we will tell you how safe your money is and whether you can withdraw it or not?
Why did RBI cancel the bank’s license?
According to RBI, Karwar Urban Co-operative Bank neither had sufficient capital left nor any good earning prospects in the future. That is, the bank was not in a position to meet its expenses and liabilities. In such a situation, the Reserve Bank cancelled the license of the bank and asked the Karnataka government to start the process of closing the bank and appointing a liquidator.
Now how safe is your money deposited in the bank?
For such a situation, the government has an insurance facility called DICGC i.e. Deposit Insurance and Credit Guarantee Corporation. Under this, if a bank closes down, every account holder gets back a maximum of Rs 5 lakh from his deposit amount.
According to the RBI statement, 92.9 percent of the account holders of Karwar Urban Bank fall completely under this insurance limit of Rs 5 lakh. That is, about 93 percent of the people are likely to get their entire deposit amount back. Till now, Rs 37.79 crore has also been paid by DICGC till June 30, 2025.
What will happen to the money deposited by the customers?
People who have accounts in this bank need not panic for now. RBI has started the process of closing the bank and the process of getting the money back up to the limit decided by DICGC is also going on. Account holders should contact the bank or DICGC and get information about the documents and process required for their claim.
If your deposit is more than Rs 5 lakh, there is no guarantee of getting the remaining amount. Therefore, in future, before depositing money in such banks, do check their status.
Keep these things in mind
This is a lesson for those who deposit their savings in small cooperative banks. Before depositing money in any bank, it is very important to look at its financial condition, RBI report and credit rating. Always give preference to safe options like government banks or financial institutions regulated by RBI.
