RBI Cancels Licenses of 11 Banks in 2024 to Protect Depositors

In 2024, the Reserve Bank of India (RBI) canceled the licenses of 11 banks to safeguard depositors’ interests. However, this decision limited customers to withdrawing only a fixed amount of their deposits.

The RBI took this step because these banks were struggling with insufficient capital, low earnings, and violations of the Banking Regulation Act of 1949. The banks were unable to repay their depositors, posing a significant risk to public funds. As a result, the RBI permanently shut down these banks, barring them from accepting deposits or conducting business.

Banks Whose Licenses Were Canceled in 2024:

1. Durga Co-operative Urban Bank Limited, Vijayawada, Andhra Pradesh
2. Shimsha Sahakari Bank Niyamitra, Maddur, Mandya, Karnataka
3. Shri Mahalakshmi Mercantile Co-operative Bank Limited, Dabhoi, Gujarat
4. The Hiriyur Urban Co-operative Bank Limited, Hiriyur, Karnataka
5. Jai Prakash Narayan Nagari Sahakari Bank Limited, Basmathnagar, Maharashtra
6. Sumerpur Mercantile Urban Co-operative Bank Limited, Sumerpur, Pali, Rajasthan
7. The Mahabhairab Co-operative Urban Bank Limited, Tezpur, Assam
8. Purvanchal Co-operative Bank Limited, Ghazipur, Uttar Pradesh
9. The City Co-operative Bank Limited, Mumbai, Maharashtra
10. Banaras Mercantile Co-operative Bank Limited, Varanasi, Uttar Pradesh
11. Uravakonda Co-operative Town Bank Limited, Andhra Pradesh

Can Customers Get Their Money Back?

Yes, customers can claim their deposits under the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act of 1961.

• Each depositor is insured for up to ₹5 lakh, including both principal and interest.
• This insurance ensures that depositors get a portion of their funds even if the bank cannot repay.

The RBI’s actions highlight its commitment to protecting public funds and maintaining financial stability.