RBI Canceled the Lucknow-based HCBL cooperative bank license for compliance with rules | Mint

Mumbai: The Reserve Bank said on Monday that it canceled the Lucknow HCBL cooperative bank, as the lender does not have sufficient capital and earnings. As a result, the bank ceases to operate bank companies, with the end of the business on May 19, the Reserve Bank of India (RBI) said in a statement. The Commissioner and Registrar of Co -operative, Uttar Pradesh, was also requested to issue an order for the bank’s liquidation and appointing a Liquidator for the Bank, it states. In the liquidation, each depositer would be entitled to receive an amount for deposit assurance of his/her deposits up to £ 5 from the deposit insurance and credit guarantee corporation (DICGC). According to the data submitted by the bank, 98.69 percent of the depositors are entitled to receive the full amount of their deposits from DicGC, RBI said. On January 31, 2025, DICGC had already paid £ 21.24 of the total insured deposits. The RBI said that the cooperative bank did not meet the requirements of certain divisions of the Bank Regulatory Act, 1949, and that the continuation of the bank would harm the interests of its depositors. “The bank with its current financial position would not be able to pay its current depositors in full,” he said, adding that public interest would be adversely affected if the bank was allowed to continue its banking business. Due to the cancellation of its license, the HCBL cooperative bank is prohibited from running the business of ‘banking’, which includes the acceptance of deposits and repayment of deposits with immediate effect.