Due to insufficient capital and revenue potential, the RBI terminates the Banaras Merchantile Co-operative Bank's license

According to the bank's statistics, 99.98 percent of depositors are eligible to collect their whole deposit amount from DICGC, according to the announcement.

On July 4, the Reserve Bank of India (RBI) announced that it has revoked Banaras Merchantile Co-operative Bank's license due to insufficient capital and earnings potential.

"If the bank is allowed to carry on its banking business any further, it will be detrimental to the interests of its depositors, the bank with its current financial position would not be able to pay its present depositors in full, and the public interest will suffer," the RBI stated in a release.

The RBI also said that the bank was immediately forbidden from engaging in "banking" activities after the license termination, which includes, among other things, accepting and repaying deposits.

In a press statement, the central bank said that, according to the terms of the DICGC Act, 1961, each depositor would be eligible to receive, upon liquidation, the full value of their deposits, up to a maximum of Rs 5 lakh, from the Deposit Insurance and Credit Guarantee Corporation (DICGC).

According to the bank's statistics, 99.98 percent of depositors are eligible to collect their whole deposit amount from DICGC, according to the announcement.

According to the press release, as of April 30, 2024, DICGC has already paid Rs 4.25 crore of the total insured deposits, depending on the bank's depositors' desire to participate