RBI Revokes Licence of Colour Merchants Co-operative Bank

The Reserve Bank of India has cancelled the licence of Colour Merchants Co-operative Bank due to inadequate capital and poor earning prospects. The bank will cease operations immediately, and a liquidator is to be appointed. Deposit insurance will cover eligible depositors up to Rs 5 lakh.

The Reserve Bank of India (RBI) has revoked the licence of Ahmedabad-based Colour Merchants Co-operative Bank, citing insufficient capital and bleak earning prospects.

The Registrar of Cooperative Societies in Gujarat has been requested to initiate the bank's winding-up process and assign a liquidator. On liquidation, depositors can claim up to Rs 5 lakh through the Deposit Insurance and Credit Guarantee Corporation (DICGC).

According to the cooperative bank's data, 98.51% of its depositors are eligible to receive their complete insured deposits from DICGC. As of March 31, 2024, Rs 13.94 crore has been disbursed to depositors willing to claim. The RBI stated that allowing the bank to continue would harm public interest.

(With inputs from agencies.)