The Reserve Bank of India has cancelled the licence of Nagar Urban Co-operative Bank Ltd., Ahmednagar, Maharashtra. Consequently, the UCB ceases to carry on banking business, with effect from the close of business on October 04, 2023, informs a press release.
The Additional Secretary & Central Registrar of Cooperative Societies, Ministry of Cooperation, Government of India has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank.
RBI cancelled the licence of the bank because it does not have adequate capital and earning prospects. “The continuance of the bank is prejudicial to the interests of its depositors; The bank with its present financial position would be unable to pay its present depositors in full; and Public interest would be adversely affected if the bank is allowed to carry on its banking business any further”, reads the release.
On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5,00,000/- (Rupees five lakh only) from Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of DICGC Act, 1961.
As per the data submitted by the bank, 95.15% of the depositors are entitled to receive the full amount of their deposits from DICGC. As on March 31, 2023, DICGC has already paid Rs 294.85 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961 based on the willingness received from the concerned depositors of the bank, claimed the release.