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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 prospects.
The Registrar of Cooperative Societies, West Bengal has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank.
Depositors will receive the full amount of their deposits from the Deposit Insurance and Credit Guarantee Corporation (DICGC). However, depositors are entitled to receive claim benefits of up to ₹5 lakh.
The bank is now prohibited from conducting the business of 'banking' which includes acceptance of deposits and repayment of deposits. "The continuance of the bank is prejudicial to the interests of its depositors," RBI said.
The continuance of the bank is prejudicial to the interests of its depositors and the bank with its present financial position would be unable to pay its present depositors in full, the RBI said.
Public interest would be adversely affected if the bank is allowed to carry on its banking business any further, the RBI said.
Source: livemint.com, zeenews.india.com, moneycontrol.com
Written by Siddhant Sharma
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