Uttar Pradesh-based Urban Cooperative Bank's License Cancelled by RBI
Moneylife Digital Team 08 December 2023
The Reserve Bank of India (RBI) has cancelled the certificate of registration of Sitapur, Uttar Pradesh-based Urban Cooperative Bank Ltd, due to the lender's inadequate capital and poor earnings prospects. RBI has asked the Bank to stop banking business from 7 December 2023.
RBI says that Urban Cooperative Bank does not have adequate capital and earning prospects and has 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.
Consequent to the cancellation of its licence, Urban Cooperative Bank is prohibited from conducting the business, including acceptance of fresh deposits.
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 Urban Cooperative Bank, 98.32% of its depositors are entitled to receive full amount of their deposits from DICGC.
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