Reetu | Oct 5, 2023 |
RBI cancels Licence of Nagar Urban Co-operative Bank; Know Reason
The Reserve Bank of India (RBI) has cancelled the licence of Nagar Urban Co-operative Bank Ltd., Ahmednagar, Maharashtra vide order dated October 4, 2023. Consequently, the bank ceases to carry on banking business, with effect from the close of business on October 04, 2023.
It has also been requested that an order be issued by the Additional Secretary and Central Registrar of Cooperative Societies, Ministry of Cooperation, Government of India, winding up the bank and appointing a liquidator for the bank.
RBI cancelled the licence of the bank as:
With immediate effect, Nagar Urban Co-operative Bank Ltd., Ahmednagar, Maharashtra is forbidden from conducting the “banking” business, which includes, among other things, accepting deposits and repaying deposits as defined in Section 5(b) read with Section 56 of the Banking Regulation Act, 1949, as a result of the cancellation of its licence.
Each depositor is entitled to receive a deposit insurance claim amount from the Deposit Insurance and Credit Guarantee Corporation (DICGC) upon liquidation, up to a maximum of Rs. 5,00,000 (Rupees five lakh only), subject to the provisions of the DICGC Act, 1961. 95.15% of the depositors are eligible to receive the full amount of their deposits from DICGC, according to data provided by the bank. As of March 31, 2023, the DICGC had already paid out 294.85 crore rupees of the total insured deposits in accordance with Section 18A of the DICGC Act, 1961, based on the consent given by the relevant bank depositors.
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