The Reserve Bank of India on Friday said it has cancelled the licence of Jalandhar-based Imperial Urban Co-operative Bank as the lender does not have adequate capital and earning prospects.
The Registrar of Cooperative Societies, Government of Punjab has also been requested to issue an order for winding up of the bank and appoint a liquidator for the bank.
On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to Rs 5 lakh from Deposit Insurance and Credit Guarantee Corp.
According to the data submitted by the bank, RBI said 97.79% of the depositors are entitled to receive the full amount of their deposits from DICGC.
As on Jan. 31, 2025 DICGC has already paid Rs 5.41 crore of the total insured deposits.
Giving reasons for cancellation of the licence of Imperial Urban Co-operative Bank, the RBI said 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," RBI said and added that public interest would be adversely affected if the bank is allowed to carry on banking business any further.
Consequent to the cancellation of its licence, Imperial Urban Co-operative Bank has been prohibited from conducting the business of ‘banking' which includes, among other things, acceptance of deposits and repayment of deposits with immediate effect.
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