RBI cancels licence of Uttar Pradesh-based United India Co-operative Bank

The Reserve Bank of India (RBI) has revoked the license of the Uttar Pradesh-based United Cooperative Bank of India.

Hence, the bank (Nagina, Bijnor, Uttar Pradesh) will cease to conduct banking business from the end of business on July 19, 2023, according to a RBI statement.

The Central Bank said the Commissioner and Registrar of Cooperatives, Uttar Pradesh, was also asked to issue an order to dissolve the bank and appoint a liquidator for it.

“On liquidation, each depositor is entitled to receive Deposit Insurance Claim amount for his Deposit/Deposits up to a cash cap of Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC) as per the provisions of the DICGC Act 1961.

“According to the data provided by the Bank, 99.98 per cent of the depositors are entitled to receive the full amount of their deposits from DICGC,” the RBI said.

The RBI indicated that the bank did not have adequate capital and earning prospects and failed to comply with the requirements of the relevant sections of the Banking Regulation Act, 1949.

“The continuation of the bank harms the interests of depositors. In its current financial position, the bank will not be able to pay existing depositors in full; and the public interest will be negatively affected if the bank is allowed to continue its banking business even further,” according to the central bank.