Vijaywada-based Durga Cooperative Urban Bank’s Licence Cancelled by RBI
Moneylife Digital Team 13 November 2024
Reserve Bank of India (RBI) has cancelled the certificate of registration (CoR) of Vijayawada, Andhra Pradesh-based Durga Cooperative Urban Bank Ltd due to inadequate capital and poor earning prospects of the lender. RBI has asked the Bank to stop banking business from 12 November 2024.
 
RBI says Durga Cooperative Urban 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 Durga Cooperative Urban 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, Durga Cooperative Urban Bank is prohibited from conducting business, including accepting fresh and repaying deposits.
 
According to RBI, on liquidation, every depositor of Durga Cooperative Urban Bank 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 Durga Cooperative Urban Bank, 95.80% of the depositors are entitled to receive the full amount of their deposits from DICGC. As of 31 August 2024, DICGC has already paid Rs9.84 crore of the total insured deposits based on the willingness received from the concerned depositors of the Andhra Pradesh-based lender.
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