RBI Cancels License of Lucknow Urban Co-operative Bank

RBI Cancels License of Lucknow Urban Co-operative Bank

VoM News Desk | September 30, 2023 | 12:27 AM IST | Breaking News | Follow on Google News

RBI Cancels License of Lucknow Urban Co-operative Bank

The Reserve Bank of India (RBI) has announced the cancellation of the banking license of Lucknow Urban Co-operative Bank due to the bank’s inadequate capital and earning prospects. The Commissioner and Registrar of Cooperative, Uttar Pradesh, have been requested to issue an order for the bank’s winding up and to appoint a liquidator.

Upon liquidation, depositors will be entitled to receive a deposit insurance claim amount of up to ₹5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC) . According to the data provided by the bank, 99.53 percent of depositors are eligible to receive the full amount of their deposits from DICGC.

The RBI stated that the bank’s present financial position would not allow it to pay its depositors in full, and allowing the bank to continue its operations would be detrimental to public interest. Consequently, the bank is prohibited from conducting banking activities, including accepting and repaying deposits, with immediate effect.

This move by the RBI underscores the importance of regulatory oversight and financial stability in the Indian banking sector.

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