Page 9 - Banking Finance July 2021

RBI CORNER

Reserve Bank

News

RBI cancels the license of According to the data submitted by available only in five segments - direct
the bank, all the depositors will to home (DTH), electricity, gas,
West Bengal based United receive the full amount of their telecom and water.

Cooperative Bank deposits from Deposit Insurance and "With consistent growth in different
Credit Guarantee Corporation
The Reserve Bank of India said it has biller categories and to facilitate
cancelled the license of the United Co- (DICGC). mobile prepaid customers with more
operative Bank Ltd, Bagnan in West On liquidation, every depositor would options to recharge, it has been
Bengal as the bank does not have be entitled to receive deposit decided to permit 'mobile prepaid
adequate capital and earning insurance claim amount in respect of recharges' as a biller category in
prospects. his/her deposits up to a monetary BBPS, on a voluntary basis," the RBI
ceiling of Rs. 5,00,000/- (Rupees Five said in a circular. There were about
The Registrar of Cooperative
Societies, West Bengal has also been lakh only) from the DICGC subject to 1,100 million prepaid phone
requested to issue an order for the provisions of the DICGC Act, 1961. subscribers in India as on December
2020. This will be implemented on or
winding up the bank and appoint a
liquidator for the bank. Reserve Bank: Mobile before August 31, 2021, it added.
The central bank said that as a prepaid recharge facility
consequence of the cancellation of its on BBPS by Aug-end RBI is unlikely to ease its
license, the United Co-operative Bank, The Reserve Bank of India said the new norms for bank audit
Bagnan, West Bengal is prohibited The RBI has said that it is unlikely to
scope of the Bharat Bill Payment
from conducting the business of ease its new norms for bank audit,
System (BBPS) will be expanded by
'banking', which includes acceptance August 31 this year by adding 'mobile despite a volley of protest from
of deposits and repayment of deposits industry lobby groups, arguing that
prepaid recharges' as a biller
as defined in Section 5 (b) read with the rules are meant to avoid any
category, a move likely to help
Section 56 of the Banking Regulation millions of prepaid phone subscribers conflict of interest and make the
Act, 1949 with immediate effect. in the country. In September 2019, process more transparent.
With the cancellation of license and the scope and coverage of BBPS were There is a large pool of auditors to
commencement of liquidation expanded to include all categories of choose from - around 600-700
proceedings, the process of paying the billers who raise recurring bills (except empanelled by the Comptroller &
depositors of United Co-operative mobile prepaid recharges) as eligible Auditor General - and the plan has
Bank, Bagnan, West Bengal as per participants, on a voluntary basis. support from professional bodies such
the DICGC Act, 1961 will be set in Before that, the facility of payment of as the Institute of Chartered
motion, it added. recurring bills through BBPS was Accountants of India. The change in

BANKING FINANCE | JULY | 2021 | 9