Reserve Bank of India (RBI) has cancelled the licence of United Commercial Co-operative Bank based in Kanpur (Uttar Pradesh). The Registrar of Co-operative Societies Uttar Pradesh has also been requested to issue an order for winding up of the bank and appoint a liquidator.
The Reserve Bank cancelled the licence of the bank citing several reasons such as the operations of bank were being carried out in a manner detrimental to the interests of the present and future depositors.
An RBI release says the bank was not in a position to pay its present and future depositors in full as and when their claims accrue. The financial position of the bank was so precarious that there was no scope for its revival and Public interest would be affected adversely if the bank was allowed to carry on its business in the manner in which it was functioning, any further.
Consequent to the cancellation of its licence, United Commercial Co-operative Bank Ltd., Kanpur (Uttar Pradesh), is prohibited from conducting the business of with immediate effect.
With the cancellation of licence and commencement of liquidation proceedings, the process of paying the depositors of United Commercial Co-operative Bank Ltd., Kanpur (Uttar Pradesh), as per the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, 1961 will be set in motion. On liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of Rupees One lakh only from the DICGC as per usual terms and conditions.
