Karwar Urban Cooperative Bank’s Licence Cancelled by RBI
Moneylife Digital Team 24 July 2025
Reserve Bank of India (RBI) has cancelled the certificate of registration (CoR) of Karnataka-based Karwar Urban Cooperative Bank Ltd due to inadequate capital and the lender's poor earnings prospects. RBI has asked Karwar Urban Cooperative Bank to stop its banking business from 23 July 2025.
 
According to RBI, Karwar Urban Cooperative Bank does not have adequate capital and earning prospects and has failed to comply with the requirements of the Banking Regulation Act.
 
“The continuance of Karwar Urban Cooperative Bank is prejudicial to the interests of its depositors. With its present financial position, it would be unable to pay its present depositors in full. The public interest would be adversely affected if the Bank is allowed to carry on its banking business any further,” the central bank says.
 
Due to the cancellation of its licence, Karwar Urban Cooperative Bank is prohibited from conducting business, including accepting fresh deposits and repaying them.
 
According to the RBI, on liquidation, every depositor of Karwar Urban Cooperative Bank is entitled to receive a deposit insurance claim amount of his or her deposits up to a monetary ceiling of Rs5 lakh from the deposit insurance and credit guarantee corporation (DICGC).
 
As per the data submitted by Karwar Urban Cooperative Bank, 92.90% of the depositors are entitled to receive the full amount of their deposits from DICGC. As of 30 June 2025, DICGC has already paid Rs37.79 crore of the total insured deposits based on the willingness received from the concerned depositors of the Karnataka-based lender.
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