The Reserve Bank of India (RBI) cancelling a cooperative bank's licence is not new. This is usually the last resort after putting the cooperative bank under restrictions and attempting to revive it. Once the licence is cancelled, the Commissioner for Cooperation and Registrar of Cooperative Societies is requested to issue an order for winding up the bank and appoint a liquidator. Consequently, the bank ceases to carry on banking business. Depositors, on the other hand, are entitled to receive a deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
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