The Reserve Bank of India said the licence of Deccan Urban Co-operative Bank, Karnataka, has been cancelled as the lender does not have adequate capital and earning prospects. As per the data submitted by the bank, more than 99 per cent of the depositors are entitled to receive the full amount of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC), the central bank said.
The cooperative bank ceases to carry on banking business. “The bank does not have adequate capital and earning prospects,” the RBI said while announcing the cancellation of the licence.
It also said the Vijayapur-based bank with its present financial position would be unable to pay its present depositors in full.
The RBI has requested the Commissioner for Cooperation and Registrar of Cooperative Societies, Karnataka, to issue an order for winding up the bank and appoint a liquidator for the bank.
On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to Rs 5 lakh DICGC.
As of August 06, 2022, DICGC has already paid Rs 13.07 crore of the total insured deposits.