RBI Cancels Purvanchal Cooperative Bank's Licence
The cooperative bank, with its present financial position, would be unable to pay its present depositors in full, the RBI says.
The licence of Purvanchal Cooperative Bank Ltd. in Uttar Pradesh's Ghazipur has been cancelled by the Reserve Bank of India as it does not have adequate capital and earning prospects.
The central bank also asked the commissioner for cooperation and the registrar of cooperative societies in Uttar Pradesh to issue an order for winding up the bank and appoint a liquidator, according to a statement.
On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to Rs 5 lakh only from the Deposit Insurance and Credit Guarantee Corp.
As per the data submitted by Purvanchal Cooperative, about 99.51% of the depositors are entitled to receive full amount of their deposits from DICGC. The cooperative bank, with its present financial position, would be unable to pay its present depositors in full, the RBI said.
"The bank does not have adequate capital and earning prospects," it said, adding that public interest would be adversely affected if the bank is allowed to carry on its banking business any further.
On the cancellation of its licence, Purvanchal Cooperative has been prohibited from conducting the business of banking, which includes and repayment of deposits.
The RBI also informed that the DICGC, as on May 30, has already paid Rs 12.63 crore of the total insured deposits based on the willingness received from the depositors concerned of the bank.
(With inputs from PTI.)
