Mumbai, April 16 (PTI) Reserve Bank said on Wednesday it has cancelled the license of the Ahmedabad-based “Color Merchants Cooperative Bank” due to the lack of sufficient capital and prospects for making money.
The Registrar of Gujarat Cooperatives was also asked to issue an order to clear the bank and appoint liquidators for the bank, the Reserve Bank of India (RBI) said in a statement.
At liquidation, each depositor will be entitled to the amount of deposit insurance claims for his or her deposit until the currency cap ₹500,000 from Deposit Insurance and Credit Guarantee Company (DICGC).
The Reserve Bank of India further stated that, according to data submitted by the Cooperative Bank, about 98.51% of depositors are entitled to receive full deposits from the DICGC.
As of March 31, 2024, DICGC has paid ₹Based on the bank’s intentions of the depositors, the total insurance deposit is 134 million.
The Reserve Bank of India said the cancellation of the license was because the bank did not have enough capital and prospects to make money.
Cooperative banks also fail to comply with certain requirements of the Banking Regulations Act.
“The bank’s continued reliance on the interests of depositors. The bank’s current financial position will not be able to pay its current depositors in full,” the Reserve Bank said.
The RBI also said that if banks are allowed to further engage in their banking business, the public interest will be adversely affected.
After the cancellation of the license, the Cooperative Bank stopped engaging in banking business from the end of its business on Wednesday (April 16, 2025).
Banking includes accepting deposits and deposit repayments.
