BANKING AND ECONOMY
The license of ‘The Mudhol Co-operative Bank Limited’ was canceled by the Reserve Bank of India (RBI) under Section 35A and section 56 of the Banking Regulation Act, 1949. The Co-Op Bank is located at Bagalkot in Karnataka.
The cancellation of the license restricts the bank from repayment of deposits and acceptance of fresh funds i.e. the bank was prohibited from conducting the 'banking' business. The RBI restricted the bank’s process as the bank does not have adequate capital and earning prospects.
The Co-operative bank is unable to pay its current depositors in full, at their current financial position.
More than 99% of the depositors of the bank are entitled to claim the full amount of their deposits i.e. up to Rs.5 lakhs as deposit insurance from the Deposit Insurance and Credit Guarantee Corporation (DICGC). The DICGC has already paid Rs 16.69 crore of the total insured deposits based on the willingness received from the concerned depositors of the bank.