RBI cancels the license of Urban Co-operative Bank Ltd., Sitapur, Uttar Pradesh

Case Brief

The Reserve Bank of India cancelled the licence of Urban Co-operative Bank Limited, Sitapur, Uttar Pradesh by order dated December 6, 2023. RBI said the bank lacked adequate capital and earning prospects, failed to meet multiple licensing requirements under the Banking Regulation Act, 1949, and that its continuance would be prejudicial to depositors and public interest. As a result, the bank ceases to carry on banking business with effect from the close of business on December 7, 2023, and is prohibited with immediate effect from conducting banking business, including accepting and repaying deposits. The Commissioner and Registrar of Cooperative, Uttar Pradesh has been asked to initiate winding-up and appoint a liquidator. DICGC deposit insurance applies up to the statutory ceiling of ₹5 lakh per depositor, and the release says 98.32% of depositors are eligible to receive their full deposits under this cover.