The financial institution ceases to lift on Banking business, impacting the shut of enterprise on May 31. The bank does now not have ample capital and earning prospects. As such, it does now not comply with the provision of the Banking Regulation Act, 1949.
With its present financial position, the RBI found that the bank would be unable to pay its current depositors in full. The financial institution was positioned underneath RBI Directions from commercial enterprise on May 4, 2019.
With the cancellation of licence & commencement of liquidation proceedings, the procedure of paying the financial institution’s depositors as per the Deposit Insurance & Credit Guarantee Corporation (DICGC). Act, 1961, will be set in motion. As per the information submitted by way of the bank, more than 98 per cent of the depositors will obtain total quantities of their deposits from DICGC.