Ahmedabad-Based Colour Merchants Co-op Bank No Longer Permitted to Operate | What Depositors Should Know

New Delhi: The Reserve Bank of India (RBI) announced the cancellation of the banking licence of Ahmedabad-based Colour Merchants Co-operative Bank, citing insufficient capital and bleak earning prospects. 

According to an official statement, the decision was made after it was determined that the bank no longer met the conditions required under the Banking Regulation Act. As a result, it cannot continue to conduct banking operations as defined under Section 5(b) of the Act. 

The RBI has also requested the Registrar of Cooperative Societies, Gujarat, to issue a formal order to wind up the bank and appoint a liquidator to oversee the process.

In line with standard procedures for failed banks, depositors of Colour Merchants Co-operative Bank will be entitled to receive up to ₹5 lakh under the Deposit Insurance and Credit Guarantee Corporation (DICGC) insurance scheme. This compensation covers both principal and interest amounts.