RBI cancels the license of Milath Co-Operative Bank Limited located in Davangere, Karnataka

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RBI has so far canceled the license of many banks and financial institution. At the same time, now RBI has canceled the license of Millath Co-Operative Bank Limited located in Davanagere, Karnataka.

RBI Canceled Bank License: All banks are open for necessary financial work in any situation in the whole country, as well as work is regular in all banks. Many times it is due to some mistake or omission or disturbance from the banks or non-banking finance companies. In such a situation, the work of taking action against them is done by the Reserve Bank of India (RBI), which monitors all the banks of India. RBI can impose fine on any bank or financial institution without any permission and can also cancel their license. At the same time, RBI has so far canceled the license of many banks and financial institution. At the same time, now RBI has canceled the license of another bank.

RBI canceled the license of the bank:

Actually, the Reserve Bank of India (RBI) controls all the banks and financial institution. The reins of all these remain in the hands of RBI and RBI has set many rules for these banks. Whenever a bank violates any rule, RBI takes decisions like canceling the license of these banks and imposing fine. At the same time, now RBI has taken major action against Millath Co-operative Bank Ltd., Davangere based in Davangere, Karnataka, canceled their license due to irregularities and violation of rules.

Information given by RBI:

The Reserve Bank of India (RBI) has taken this action against this bank because of this. Because, Milath Co-Operative Bank Ltd. The bank does not have sufficient capital and is not in a position to repay the entire amount to its existing depositors. Giving information about this, the Reserve Bank has issued a statement saying that,Bank will not be able to do banking business after the closure of business on Saturday 18th June, 2022. The depositors will get their entire deposits through the Deposit Insurance and Credit Guarantee Corporation (DICGC) as per the details furnished by the bank. Every depositor is entitled to claim deposit insurance from DICGC in the event of appointment of liquidator. Its limit is up to Rs 5 lakh. If the bank is allowed to continue with the banking business further, it will adversely affect the public interest. As on May 18, 2022, DICGC has made a payment of Rs.10.38 crore of the total deposits under the provisions of section 18A of the DICGC Act, 1961 based on the request received from the concerned depositors of the bank.’

RBI Press Release:”The Registrar of Co-operative Societies of Karnataka has also been requested to issue an order to close the bank and appoint a liquidator for the bank ,” the RBI said in a press release. There is no sufficient capital and no earning prospects. The Union Minister said that the Milath Co-operative Bank Ltd. has failed to comply with the provisions of section 56 of the Banking Regulation Act, 1949.

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