The Reserve Bank of India (RBI) on Thursday said it has cancelled the licence of the United Co-operative Bank Ltd, Bagnan in West Bengal as the bank does not have adequate capital and earning.
The bank ceases to carry on banking business, with effect from the close of business on May 13, 2021
RBI statment read as
“Consequent to the cancellation of its licence, United Co-operative Bank Ltd, Bagnan, West Bengal, is prohibited from conducting the business of ‘banking’ which includes acceptance of deposits and repayment of deposits as defined in Section 5 (b) read with Section 56 of the Banking Regulation Act, 1949 with immediate effect,”
Public interest would be adversely affected if the bank is allowed to carry on its banking business any further, it further added.
Appointment of liquidator
The RBI has requested the Registrar of Cooperative Societies, West Bengal to issue an order for winding up the bank and appoint a liquidator.
What about the amount of depositors?
All the current depositors of the bank will receive full amount of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC).
The bank with its present financial position would be unable to pay its present depositors in full.
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.
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