Ahmedabad: The Reserve Bank of India (RBI) canceled the license of Color Merchants Co-operative Bank in Ahmedabad on 16 April 2025. The bank said that the revenue capacity of this operative bank is low and does not have enough capital to operate the banking system. Therefore, the license of this bank is being canceled.
The RBI also clarified that the financial situation of the Color Merchants Co-operative Bank has become so bad that it is not able to pay its depositors fully. , If the bank continues to work even in such a situation, it will be against the interest of the depositors.
The central bank took this step to violate some provisions of the Banking Regulation Act, 1949 and cancel the license of the Color Merchants Co-operative Bank keeping in mind the public interest of the depositors.
What will be the effect on the bank?
The bank’s decision to cancel the license came into effect on April 16, 2025 after the bank shut down its business. This means that banks will not be able to accept the new deposit at the moment nor will they be able to distribute any new loan. The RBI had ordered the registrar of the cooperative societies of Gujarat to cancel the bank’s license and stop operating. Along with this, it has also been asked to appoint a liquidator.
What will be the effect on account holders?
Maximum Rs. Insurance claim up to Rs 5 lakh. You will get 5 lakh rupees. The good thing is that data from banks show that about 98.51% depositors will get their full amount. DICGC has paid Rs 13.94 crore to depositors by 31 March 2024.
This ban has been imposed earlier.
The RBI has already taken action against the bank due to poor financial situation. In September 2023, several restrictions were imposed due to the bank’s poor condition. These sanctions included a withdrawal limit of Rs 50,000 per customer, depositing new money and restrictions on loan or investment etc.
The RBI has extended these sanctions for three months in March and June 2024. So that it can be determined whether the financial situation of the bank has improved.
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