The Reserve Bank of India cancelled the license of Uttar Pradesh’s Bijnor based United India Cooperative Bank on Wednesday. As per the data submitted by the bank, 99.98% of the depositors are entitled to receive the full amount of their deposits from DICGC, RBI’s press release stated.
On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5,00,000/- (Rupees five lakh only) from Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of DICGC Act, 1961.
In the press release RBI says “ Bijnor based United India Cooperative Bank ceases to carry on banking business, with effect from the close of business on July 19, 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 it does not have adequate capital and earning prospects. As such, it does not comply with the provisions of Section 11(1) and Section 22 (3) (d) read with Section 56 of the Banking Regulation Act, 1949.
The bank has failed to comply with the requirements of Sections 22(3) (a), 22 (3) (b), 22(3)(c), 22(3) (d) and 22(3)(e) read with Section 56 of the Banking Regulation Act, 1949 and the continuance of the bank is prejudicial to the interests of its depositors, said RBI in its press release.
The bank with its present financial position would be unable to pay its present depositors in full; and Public interest would be adversely affected if the bank is allowed to carry on its banking business any further, it further reads.