RBI Cancels Licence Of Urban Co-op Bank In UP Over Inadequate Funds

The RBI on Thursday cancelled the licence of Urban Co-operative Bank Limited, Sitapur, Uttar Pradesh as the lender does not have adequate capital and earning prospects.

RBI Cancels Licence Of Urban Co-op Bank In UP Over Inadequate Funds

The cooprative bank has been prohibited from conducting the business of 'banking' (Representational)

Mumbai:

The RBI on Thursday cancelled the licence of Urban Co-operative Bank Limited, Sitapur, Uttar Pradesh as the lender does not have adequate capital and earning prospects.

Consequently, the bank ceases to carry on banking business, with effect from the close of business on Thursday (December 07, 2023), the central bank said in a statement.

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.

On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5 lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC).

"As per the data submitted by the bank, 98.32 per cent of the depositors are entitled to receive full amount of their deposits from DICGC," the Reserve Bank said.

The cooprative bank has been prohibited from conducting the business of 'banking' which includes, among other things, acceptance of deposits and repayment of deposits.

Giving reasons for cancelling the licence, it said the cooperative bank does not have adequate capital and earning prospects, and would be unable to pay its present depositors in full. 

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