RBI cancels licence of Lucknow-based HCBL Co-operative Bank for not complying with rules
Mumbai:The Reserve Bank on Monday said it has cancelled the licence of Lucknow-based HCBL Co-operative Bank as the lender does not have adequate capital and earning prospects.
Consequently, the bank ceases to carry on banking business, with effect from the close of business on May 19, the Reserve Bank of India (RBI) said in a statement.
The Commissioner and Registrar of Cooperative, Uttar Pradesh has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank, it said.
On liquidation, every depositor would be entitled to receive a deposit insurance claim amount of his/her deposits up to ₹ 5 lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC).
As per the data submitted by the bank, 98.69 per cent of the depositors are entitled to receive the full amount of their deposits from DICGC, RBI said.
As of January 31, 2025, DICGC has already paid ₹ 21.24 crore of the total insured deposits.
Giving details, the RBI said the cooperative bank has failed to comply with the requirements of certain sections of the Banking Regulation Act, 1949, and 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," it said and added that public interest would be adversely affected if the bank is allowed to carry on its banking business any further.
Consequent to the cancellation of its licence, HCBL 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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