May 14, 2021 04:38 PM
The Reserve Bank of India (RBI) has said it is revoking the license of United Co-operative Bank in West Bengal. The decision was taken by the RBI due to insufficient capital and lack of profitability of the bank. The RBI said the bank had issued orders not to conduct business activities after the end of working hours on May 13, 2021.
The banking regulator Reserve Bank of India on Thursday notified that it has revoked the licence of United Co-operative Bank Ltd, Bagnan, West Bengal, as it does not possess the required capital and earning prospects.
The central bank has also ceased the bank’s power to carry on banking business, which will be effective from the close of business on May 13, 2021. The bank will pay the full deposit from the Deposit Insurance and Credit Guarantee Corporation to all the depositors based on the details submitted.
“As per the data submitted by the bank, all the depositors of United Co-operative Bank Ltd, Bagnan, West Bengal will receive all their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC).
RBI notified, on liquidation, every depositor of the bank 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.
Sharing further details, RBI said the bank does not hold adequate capital and earning prospects. Besides, with its present financial position, the lender would not be able to pay its present depositors in full.