5 months ago
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The Reserve Bank of India (RBI) said it had cancelled the licence of “Urban Co-operative Bank Ltd, Sitapur, Uttar Pradesh” as the bank had no adequate capital and earning prospects as well as failed to comply with the provisions of the Banking Act.
“Consequently, the bank ceases to carry on banking business, with effect from the close of business on December 7. The Commissioner and Registrar of Cooperative, Uttar Pradesh has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank,” the RBI said in a circular.
Among other reasons of the cancellation of the licence, the RBI said the continuance of the bank was prejudicial to the interests of its depositors and the bank with its present financial position would be unable to pay its present depositors in full; and public interest would be adversely affected if the bank was allowed to carry on its banking business any further.
“Consequent to the cancellation of its licence, “Urban Co-operative Bank Ltd. Sitapur, Uttar Pradesh” is prohibited from conducting the business of ‘banking’ which includes, among other things, acceptance of deposits and repayment of deposits…. with immediate effect,”
On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of ₹5 lakh only from Deposit Insurance and Credit Guarantee Corporation (DICGC), the central bank said.
As per the data submitted by the bank, 98.32% of the depositors are entitled to receive full amount of their deposits from DICGC, the RBI said.
