RBI cancels banking license of United India Co-operative Bank Bijnor

The Reserve Bank of India (RBI) has cancelled the license of United India Co-operative Bank Limited, Nagina, Bijnor, Uttar Pradesh and asked the bank not to carry on any banking business, with effect from the close of business on July 19, 2023.

“United India Co-operative Bank Limited, Nagina, Bijnor, Uttar Pradesh is prohibited from conducting the business of ‘banking’ which includes, among other things, acceptance of deposits and repayment of deposits as defined in Section 5(b) read with Section 56 of the Banking Regulation Act, 1949 with immediate effect,” the Reserve Bank said.

The apex bank said the co-operative bank does not have adequate capital and earning prospects. As such, it does not comply with the provisions of Section 11(1) and Section 22 (3) (d) read with Section 56 of the Banking Regulation Act, 1949.

The banking regulator also said the bank has failed to comply with the certain sectionms of the Banking Regulation Act, 1949.

The RBI has asked the Commissioner and Registrar of Cooperative, Uttar Pradesh to issue an order for winding up the bank and appoint a liquidator for the bank.

On liquidation, the Reserve bank said every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of ₹5,00,000 (Rupees five lakh only) from Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of DICGC Act, 1961. As per the data submitted by the bank, 99.98% of the depositors are entitled to receive full amount of their deposits from DICGC.

The Reserve Bank further said the public interest would be adversely affected if the United India Co-operative Bank is allowed to carry on its banking business any further as the bank with its present financial position would be unable to pay its present depositors in full.