Sri Mallikarjuna Pattana Sahakari Bank Niyamita and National Urban Co-operative Bank’s Licence Cancelled by RBI

Moneylife Digital Team 25 September 2023

The Reserve Bank of India (RBI) has cancelled the certificate of registration of two cooperative banks, National Urban Co-operative Bank Limited from Uttar Pradesh (U.P) and Sri Mallikarjuna Pattana Sahakari Bank Niyamita from Karnataka. In two separate statements, RBI has asked these two lenders to stop banking business from 22 September 2023.

RBI says these cooperative banks do not have adequate capital and earning prospects and have failed to comply with the requirements of the banking regulation act.

“The continuance of these banks was prejudicial to the interests of its depositors. With their present financial position, these banks would be unable to pay their present depositors in full. The public interest would be adversely affected if these banks are allowed to carry on its banking business any further,” RBI says.

According to the central bank, on liquidation, every depositor of these two banks would be 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 National Urban Co-operative Bank Limited 99.87% of the depositors are entitled to receive full amount of their deposits from DICGC.

In the case of Sri Mallikarjuna Pattana Sahakari Bank Niyamita, 99.50% of the depositors are entitled to receive full amount of their deposits from DICGC. As on 31 May 2023, DICGC has already paid Rs5.38 crore of the total insured deposits based on the willingness received from the concerned depositors of the Karnataka-based bank.