The UCB cannot carry on banking business under Section 22 of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies) read with Section 56 of Banking Regulation Act, 1949, read a press release from RBI.
As such, the bank is forthwith precluded from transacting the business of ‘banking’ as defined in Section 5(b) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies) including acceptance/repayment of deposits, the release said.
The bank has been repeatedly warned in the past by the RBI to mend its ways but to little avail. Forced with no choice, RBI at last cancelled its licence.