RBI suspends Urban Co-operative Bank’s licence in Uttar Pradesh

Because Urban Co-operative Bank Limited, Sitapur, Uttar Pradesh, lacked sufficient capital and earning potential, the RBI revoked the lender’s licence. As a result, the bank stops conducting banking operations as of December 7, 2023, at the latest, according to a statement from the central bank.

Additionally, an order to wind up the bank and name a liquidator has been obtained from the Commissioner and Registrar of Cooperative, Uttar Pradesh.

Following liquidation, each depositor would be eligible to collect from Deposit Insurance and Credit Guarantee Corporation (DICGC) the full amount of their savings under deposit insurance claims, up to a maximum of Rs 5 lakh.

“As per the data submitted by the bank, 98.32 per cent of the depositors are entitled to receive full amount of their deposits from DICGC,” the RBI stated.

It is forbidden for the cooperative bank to engage in “banking” activities, which encompass accepting and repaying deposits, among other things.

The cooperative bank would not be able to pay its current depositors in full and lacked sufficient capital and earning potential, according to the reasons given for terminating the licence.