Mahabhairab Cooperative Urban Bank's Licence Cancelled by RBI
Moneylife Digital Team 24 July 2024
Reserve Bank of India (RBI) has cancelled the certificate of registration (CoR) of Assam-based Mahabhairab Cooperative Urban Bank Ltd due to the lender's inadequate capital and poor earnings prospects. RBI has asked the Bank to stop banking business from 24 July 2024.
 
RBI says that Mahabhairab Cooperative Urban Bank failed to comply with the requirements of the Banking Regulation Act.
 
"The continuance of the Bank is prejudicial to the interests of its depositors. With its present financial position, it would be unable to pay its present depositors in full. The public interest would be adversely affected if the Bank is allowed to carry on its banking business any further," RBI says.
 
Due to the cancellation of its licence, Mahabhairab Cooperative Urban Bank is prohibited from conducting business, including accepting fresh and repaying deposits.
 
According to RBI, on liquidation, every depositor is entitled to receive a deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs5 lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC).
 
As per the data submitted by Mahabhairab Cooperative Urban Bank, 99.80% of the depositors are entitled to receive the full amount of their deposits from DICGC. 
 
As of 13 June 2024, DICGC has already paid Rs20.03 crore of the total insured deposits based on the willingness received from the concerned depositors of the Assam-based Bank.
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