RBI has revoked the license of Subhadra Local Area Bank. The way the bank operates can harm the interests of existing and future depositors. The RBI this month also revoked the license of a troubled credit bank in Maharashtra. In such a situation, you need to know what will happen to your deposit capital if your bank license is revoked tomorrow?
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The bank has violated the minimum net worth condition in the first two quarters of fiscal 2019-20, the RBI said in a statement on Thursday. According to the statement, however, Subhadra Lok Kshetra Bank has enough cash to repay the depositors. The way the bank was behaving, if it had been allowed to operate in the same way, would have adversely affected the public interest, Arabi said. The nature of management operations was detrimental to the interests of current and future depositors.
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The license issued to Subhadra Local Area Bank is being revoked after the bank closed on December 24, the statement said. This will prevent them from engaging in any banking activities. The RBI will apply to the High Court for the bank’s liquidation.
Rs 5 lakh is to be given on bank closure
When closing any bank, there is a provision to return their capital to all bank account holders during that period. As per the rules of Deposit Insurance and Credit Guarantee Corporation, this limit is only up to Rs 5 lakh. This means that the account holder can get a maximum of Rs 5 lakh back after the bank closes. At the same time, the RBI says 99 per cent of Karad Bank depositors will get their full money back.