The Reserve Bank has canceled the license of Madgam Urban Co-operative Bank of Goa. According to the Reserve Bank, the bank does not have capital and earning prospects.
The Reserve Bank of India (RBI) has canceled the license of Goa’s Madgam Urban Co-operative Bank Ltd. RBI has taken this decision due to the poor financial condition of the bank. With the cancellation of the license, the bank’s deposits and payments have also been banned.
According to the Reserve Bank, the bank does not have capital and earning prospects. RBI said that in the present situation the bank is unable to make full payment to its depositors, hence it cannot be allowed to carry forward the banking business. RBI says that this move will not affect the customers of the bank. Depositors of the bank will get full money under Deposit Insurance and Credit Guarantee Corporation.
RBI said that the Registrar of Cooperative Societies of Goa has also demanded the closure of the bank. Along with this, a request has been made to issue an order to appoint a liquidator for the bank.
RBI further said, ‘Mudgam Urban Co-operative Bank does not have sufficient capital and earning prospects to run it. Also, this bank has failed to comply with various provisions of the Banking Regulation Act, 1949.
The central bank said, ‘The bank with its current financial position is unable to make full payments to its existing depositors. And if the bank was not closed, it would have had a direct impact on its customers. Therefore, it was decided to cancel the license of the bank.
