Bank license Cancelled: The Reserve Bank of India (RBI) on Wednesday canceled the license of Karwar Urban Co-operative Bank located in Karwar, Karnataka. RBI took this step in view of the continuously weakening financial position of the bank and the lack of future earning prospects…
Karwar Urban Co-operative Bank: When a bank is closed, the first impact is on those people who have deposited their hard earned money there. The news of cancellation of license of Karwar Urban Co-operative Bank has worried thousands of account holders of Karnataka. Now that the Reserve Bank of India (RBI) has canceled the license of this bank, the biggest question in the minds of the people is, is our deposited capital safe?
Will people’s money sink?
On Wednesday, 23 July 2025, RBI canceled the license of Karwar Urban Co-operative Bank, saying that the financial position of the bank had become very weak and it had no solid prospects of earning in the future. Because of this, the bank will no longer be able to do any kind of banking business. However, RBI also clarified that about 92.9% of the account holders of the bank will get their entire deposit back, but this relief is only limited to Rs 5 lakh. So far, an amount of Rs 37.79 crore has been given to the account holders under Deposit Insurance and Credit Guarantee Corporation (DICGC).
Karwar Urban Co-operative Bank: When a bank is closed, the first impact is on those people who have deposited their hard earned money there. The news of cancellation of license of Karwar Urban Co-operative Bank has worried thousands of account holders of Karnataka. Now that the Reserve Bank of India (RBI) has canceled the license of this bank, the biggest question in the minds of the people is, is our deposited capital safe?
Will people’s money sink?
On Wednesday, 23 July 2025, RBI canceled the license of Karwar Urban Co-operative Bank, saying that the financial position of the bank had become very weak and it had no solid prospects of earning in the future. Because of this, the bank will no longer be able to do any kind of banking business. However, RBI also clarified that about 92.9% of the account holders of the bank will get their entire deposit back, but this relief is only limited to Rs 5 lakh. So far, an amount of Rs 37.79 crore has been given to the account holders under Deposit Insurance and Credit Guarantee Corporation (DICGC).
fear in people
62-year-old Lakshmi Devi, a resident of Karwar, says that we had saved money for the marriage and treatment of children. Now there is a fear that everything may be lost. Ramesh, a local shopkeeper, said that we had faith in the bank, now we do not understand what to do next. RBI has taken this decision in public interest, so that the account holders do not suffer further losses. Along with this, the Registrar of Co-operative Societies of Karnataka has been instructed to start the process of closing the bank and appoint a liquidator.
This incident has once again raised the question of how strong is the monitoring and transparency of the co-operative banks operating in small towns. Common people now need to understand that while choosing a bank, it is important to look not just at proximity or convenience, but also at its financial condition and reliable record. At present, the process of relief is going on from RBI and DICGC, but for the people of Karwar, this is not just the closure of a bank – it is a severe blow to their dreams, plans and trust.
