- The Reserve Bank of India (RBI) cancelled the licence of Vijayawada-based The Durga Co-operative Urban Bank with effect from the close of business on November 12.
- The cancellation order, dated November 8, 2024, was issued due to the bank’s financial instability and failure to meet essential regulatory requirements.
- According to the RBI, the bank’s lack of adequate capital, inability to comply with sections 11(1) and 22(3) of the Banking Regulation Act, and poor earning prospects contributed to the decision.
- Additionally, the bank’s current financial state could prevent it from fully repaying depositors.
- Following this cancellation, the bank is prohibited from conducting any banking activities, including accepting or repaying deposits.
The Reserve Bank of India (RBI) cancelled the licence of Vijayawada-based The Durga Co-operative Urban Bank with effect from the close of business on November 12. The cancellation order, dated November 8, 2024, was issued due to the bank’s financial instability and failure to meet essential regulatory requirements.
According to the RBI, the bank’s lack of adequate capital, inability to comply with sections 11(1) and 22(3) of the Banking Regulation Act, and poor earning prospects contributed to the decision. Additionally, the bank’s current financial state could prevent it from fully repaying depositors.
Following this cancellation, the bank is prohibited from conducting any banking activities, including accepting or repaying deposits. The RBI has requested the Commissioner for Cooperation and the Registrar of Cooperative Societies, Andhra Pradesh, to proceed with winding up the bank and appoint a liquidator.
Depositors are eligible to receive up to ₹5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC), which has already disbursed ₹9.84 crore to eligible depositors as of August 31, 2024. Approximately 95.80% of depositors are expected to receive the full amount of their insured deposits.