RBI suspended Urban Co-operative Bank's license, situated in Uttar Pradesh

 RBI suspended Urban Co-operative Bank's license, situated in Uttar Pradesh

RBI suspended Urban Co-operative Bank's license, situated in Uttar Pradesh

98.32% of depositors are eligible to retrieve their whole deposit amount from DICGC, according to statistics provided by the bank, according to RBI.

Urban Co-operative Bank Ltd., situated in Uttar Pradesh, has had its license revoked by the Reserve Bank of India (RBI) due to inadequate capital and non-compliance with certain regulations.

The RBI said in a press statement on December 7 that as a consequence, the bank would stop doing banking activities as of the end of business on December 7, 2023.

The RBI added that as a result, an order to dissolve the bank and appoint a liquidator has been obtained from the Cooperative Commissioner and Registrar of Uttar Pradesh.

The RBI said that the move was brought about by insufficient capital and earning potential, and that the bank's continued existence would be harmful to the interests of its depositors.

"The bank with its present financial standing would be unable to deliver full payments to its current depositors as well as public interest will be negatively impacted if the bank is allowed to carry on its banking business," the central bank said.

The Urban Co-operative Bank is not allowed to carry on business as a consequence of the license being revoked, including taking on new deposits.

Subject to the terms of the DICGC Act, 1961, each depositor shall be entitled to collect the deposit insurance claim amount of his deposits from the Deposit Insurance as well as Credit Guarantee Corporation (DICGC) upon liquidation, up to a maximum of Rs five lakh. said.

98.32% of depositors are eligible to retrieve their whole deposit amount from DICGC, according to statistics provided by the bank, according to RBI.

In the last two weeks, this cooperative bank has become the second to lose its operating permission. Due to inadequate capital, the RBI revoked Shankarrao Pujari Nutan Nagari Sahakari Bank Ltd.'s license on December 4. The bank is located in Kolhapur.

According to an announcement from the RBI, the lender would cease operations as of December 4 at the end of business hours. The RBI added that requests to dissolve the bank and appoint a liquidator have also been made to the Secretary Cooperative Societies, Maharashtra, as well as the Cooperative Commissioner.

The RBI stated in a statement on November 24 that it had disbanded the board of the Mumbai-based Abhyudaya Cooperative Bank last month due to serious concerns about the bank's inadequate corporate governance standards.

The RBI measure is effective for a full year, according to the central bank. In order to oversee the bank's operations at this time, the RBI subsequently named Satya Prakash Pathak, a former chief general manager of State Bank of India, official administrator.

The RBI has been tougher on misbehaving cooperative banks in recent years. The Reserve Bank of India (RBI) disbanded the board of PMC Bank in September 2019 and imposed other regulatory measures after discovering financial irregularities as well as the concealment and misrepresentation of loans made to real estate developer HDIL.

Approximately ten cooperative banks have had their licenses revoked by the RBI in the last two years. These banks include Babaji Date Mahila Urban Bank, Deccan Urban Cooperative Bank, Lakshmi Cooperative Bank, Rupee Cooperative Bank, Mudhol Cooperative Bank, Milath Cooperative Bank, Shri Anand Cooperative Bank, as well as Seva Vikas Cooperative Bank.