Reetu | Dec 7, 2023 |
RBI cancels License of Urban Co-operative Bank; Know Why?
The Reserve Bank of India (RBI) has cancelled the licence of “Urban Co-operative Bank Limited, Sitapur, Uttar Pradesh” vide order dated December 6, 2023. Consequently, the bank ceases to carry on banking business, with effect from the close of business on December 07, 2023.
The Commissioner and Registrar of Cooperative, Uttar Pradesh has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank.
The Reserve Bank cancelled the licence of the bank as:
With immediate effect, “Urban Co-operative Bank Limited, Sitapur, Uttar Pradesh” is prohibited from conducting the business of “banking,” 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.
Subject to the rules of the DICGC Act, 1961, every depositor would be entitled to collect the deposit insurance claim amount of his/her savings up to a monetary ceiling of Rs.5,00,000 (Rupees five lakh only) from the Deposit Insurance and Credit Guarantee Corporation (DICGC) upon liquidation. According to the bank’s figures, 98.32% of depositors are entitled to the entire amount of their deposits from DICGC.
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