RBI cancels licence of West Bengal-based United Cooperative Bank

By: |
May 13, 2021 9:32 PM

The Reserve Bank of India said it has cancelled the licence of United Co-operative Bank Ltd, Bagnan, West Bengal, as it does not have adequate capital and earning prospects.

Reserve Bank of India (RBI)RBI said that banks may also ensure "compliance with relevant provisions under Foreign Exchange Management Act (FEMA) for overseas remittances.”

The Reserve Bank of India on Thursday said it has cancelled the licence of United Co-operative Bank Ltd, Bagnan, West Bengal, as it does not have adequate capital and earning prospects.

Consequently, the bank ceases to carry on banking business, with effect from the close of business on May 13, 2021, the Reserve Bank of India said in a statement.

“As per the data submitted by the bank, all the depositors will receive the full amount of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC),” it said.

On liquidation, every depositor would be entitled to receive deposit insurance claim amount in respect of his/her deposits up to a monetary ceiling of Rs 5 lakh from the DICGC subject to the provisions of the DICGC Act, 1961.

Giving details, the RBI said the bank does not have adequate capital and earning prospects. Also, the bank with its present financial position would be unable to pay its present depositors in full, it added.

United Co-operative Bank has been prohibited from conducting the business of ‘banking’ which includes acceptance of deposits and repayment of deposits with immediate effect.

The RBI has requested the Registrar of Cooperative Societies, West Bengal to issue an order for winding up the bank and appoint a liquidator.

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