Case Brief
RBI, by order dated July 15, 2016, cancelled the licence of Pioneer Urban Co-operative Bank Ltd., Lucknow, Uttar Pradesh to carry on banking business, effective from the close of business on July 25, 2016. The cancellation followed RBI's finding that the bank had not complied with minimum capital and reserves requirements under Section 11(1) of the Banking Regulation Act, 1949 (AACS), had operated in a manner detrimental to the interests of depositors and the public, and was not in a position to repay depositors in full as claims accrued. RBI further stated that the bank's financial condition left no scope for revival and that public interest would be adversely affected if it were allowed to continue. Consequent to cancellation, the bank was prohibited from conducting banking business, and the Registrar of Co-operative Societies, Uttar Pradesh, was requested to initiate winding up and appoint a liquidator. DICGC deposit insurance payment processing would be set in motion for eligible depositors, subject to the statutory ceiling.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location