- The Reserve Bank announced on Monday that it has revoked the license of HCBL Co-operative Bank, based in Lucknow, due to insufficient capital and poor earning prospects.
- As a result, the bank will stop all banking operations effective May 19, according to a statement from the Reserve Bank of India (RBI).
- The Commissioner and Registrar of Cooperative in Uttar Pradesh has also been asked to initiate the winding-up process for the bank and appoint a liquidator.
- When the bank is liquidated, every depositor will be eligible to claim deposit insurance for their deposits, up to Rs 5 lakh, from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
- According to the data provided by the bank, 98.69 percent of depositors will be able to recover the full amount of their deposits from the DICGC, as stated by the RBI.
The Reserve Bank announced on Monday that it has revoked the license of HCBL Co-operative Bank, based in Lucknow, due to insufficient capital and poor earning prospects.
As a result, the bank will stop all banking operations effective May 19, according to a statement from the Reserve Bank of India (RBI).
The Commissioner and Registrar of Cooperative in Uttar Pradesh has also been asked to initiate the winding-up process for the bank and appoint a liquidator.
When the bank is liquidated, every depositor will be eligible to claim deposit insurance for their deposits, up to Rs 5 lakh, from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
According to the data provided by the bank, 98.69 percent of depositors will be able to recover the full amount of their deposits from the DICGC, as stated by the RBI.
As of January 31, 2025, the DICGC has already disbursed Rs 21.24 crore of the total insured deposits.
The RBI explained that the cooperative bank has not met the requirements of certain sections of the Banking Regulation Act of 1949, and allowing the bank to continue operating would be detrimental to the interests of its depositors.
“The bank’s current financial situation means it would not be able to fully repay its depositors,” the RBI noted, emphasizing that public interest would suffer if the bank were permitted to continue its operations.
Following the cancellation of its license, HCBL Co-operative Bank is now barred from engaging in any banking activities, which includes accepting and repaying deposits, effective immediately.