HCBL Cooperative Bank mgmt to appeal after RBI cancels licence
The Lucknow-based HCBL Cooperative Bank Limited management has decided to appeal to the union finance secretary, following the Reserve Bank of India's (RBI) decision on Monday to cancel the bank's certificate of registration (CoR). The RBI cited inadequate capital and poor earning prospects as reasons for the cancellation.
On RBI's direction, the Commissioner and Registrar of Cooperative Societies, Uttar Pradesh, has initiated the process to wind up the bank and appoint a liquidator. The liquidator will take control of the bank's management, including its assets and liabilities, and will use the proceeds from asset sales to repay creditors according to their priority, Heera Lal, Commissioner and Registrar, Cooperative Societies UP, said.
HCBL Cooperative Bank, launched in 2002, expanded its services across nearby districts including Unnao, Barabanki, Rae Bareli, and Sitapur. The bank operated four branches and one extension counter in Lucknow, providing telebanking, SMS banking, personalised banking, and general services to approximately 10,000 customers, a bank officer who does not wished to be named said.
The bank's head office in Gomti Nagar was notably quiet on Tuesday. A few customers visited to inquire about the bank's operations after the RBI order, while bank officials held meetings to assess the situation.
The bank faced operational challenges starting in 2015 when RBI ordered its closure under Section 35A of the Banking Regulation Act, 1949. It resumed activities in 2018 but again suspended operations in 2023 following RBI directives. The bank was allowed to operate until May 2025, subject to review, the HCBL officer said.
According to the RBI, the bank's current financial position prevents it from fully repaying depositors, and continuing operations would harm public interest. 'The cancellation prohibits HCBL from conducting any banking business, including accepting or repaying deposits, with immediate effect.'
Depositors are entitled to claim deposit insurance up to ₹5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
As per bank data, 98.69% of depositors qualify for full reimbursement, with DICGC having paid ₹21.24 crore as of January 31, 2025.
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