Reserve Bank of India has cancelled the licence of “Deccan Urban Co-operative Bank Ltd., Vijayapur, Karnataka” with effect from the close of business on August 18, 2022. Consequently, the bank ceases to carry on banking business.
The Commissioner for Cooperation and Registrar of Cooperative Societies, Karnataka has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank.
The Reserve Bank cancelled the license of the bank as the bank does not have adequate capital and earning prospects. The continuance of the bank is prejudicial to the interests of its depositors, felt RBI.
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.
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, more than 99% of the depositors are entitled to receive the full amount of their deposits from DICGC. As on August 06, 2022, DICGC has already paid ?13.07 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.