Winding up of banking companies refers to the process of closing down or liquidating a banking institution. It involves the orderly cessation of the bank’s operations, settlement of its liabilities, realization of its assets, and distribution of the remaining proceeds to the stakeholders, including depositors, creditors, and shareholders.
The winding up of banking companies can occur for various reasons, such as financial insolvency, regulatory non-compliance, failure to meet obligations to depositors, or when it is deemed necessary for the protection of the interests of depositors and the public. The process is governed by specific laws and regulations, including the Banking Regulation Act, 1949, and the Companies Act, 2013, depending on the jurisdiction.
