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Ruby Jacob, 27 May 2013
If you thought it's only people or companies that can go bankrupt, think again. Banks can go broke too. 13 banks shut business, wound up and liquidated in 2012-13.
In the banking business, size matters, as is the case in many others. All of the 13 banks that had to liquidate are Co-operative Banks. Of these, 9 were from Maharashtra, 3 from Gujarat, 1 each from Andhra Pradesh and Odisha.
Among the list are Shri Balaji Co-op. Bank, Siddhartha Sahakari Bank, Boriavi Peoples Co-op. Bank, National Co-op. Bank, Bhandari Co-op. Bank, Bharat Urban Co-op. Bank, Indira Shramik Mahila Sahakari Bank, Shree Bhadran Mercantile Co-op. Bank, Dhenkanal Urban Co-op. Bank, Bhimashankar Nagri Sahakari Bank, Bhusawal Peoples Co-op. Bank, Solapur Nagari Audyogik Sahakari Bank, Krishna Valley Co-op. Bank.
Statistics of bank closure
The year 2012-13 saw fewer banks shutting than the previous years, like figures below show
No of banks liquidated
DICGC settles claims
DICGC, the insurer of bank deposits, paid out claims to 12 of the 13 banks. Every depositor is covered by DICGC for up to Rs 1 lakh in deposits with a bank. This includes savings deposit, FD, RD and all kinds of such deposits across all branches of a bank.
What happens to depositors' money?
When a bank closes and liquidates DICGC settles the claim for all depositors of the bank. All commercial banks and co-operative banks are covered by DICGC. They must pay premiums and compulsorily get insured by DICGC.