RBI has issued an order to close Urban Co-operative Bank Limited from December 7. This bank will no longer be allowed to accept deposits and make repayments.
Bank Closed: Reserve Bank of India (RBI) has canceled the license of Urban Co-operative Bank Limited (Sitapur) located in Uttar Pradesh due to low capital and earning prospects. On Wednesday, RBI had issued an order to banks to close business from Thursday, December 7.
What is the reason?
According to the RBI statement, Urban Co-operative Bank does not have sufficient capital and earning potential. This violates the provisions of Section 11 (1) and Section 22 (3) (D) read with Section 56 of the Banking Regulation Act 1949.
RBI said this
The central bank said, “The survival of the bank is detrimental to its depositors.” At present the bank is not even able to pay its depositors. In such a situation, if it is allowed to continue its business, public interest will be adversely affected.
Permission to withdraw this much amount
This cooperative bank will not be allowed to accept deposits and make repayments from December 7. Under the provisions of the DICGC Act 1949, each customer can claim a deposit amount up to Rs 5 lakh. According to the data submitted by the bank, 98.32% depositors are able to claim the entire deposit.
