Latest News | RBI Cancels Licence of Vijayawada-based Durga Co-op Urban Bank

Mumbai, Nov 12 (PTI) The Reserve Bank on Tuesday cancelled the licence of Vijayawada-based The Durga Co-operative Urban Bank as the lender does not have adequate capital and earning prospects.

The bank ceases to carry banking business, with effect from the close of business on November 12, 2024, the RBI said, adding that the Commissioner for Cooperation and Registrar of Cooperative Societies, Andhra Pradesh, has also been requested to issue an order for winding up the bank and appoint a liquidator.

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On liquidation, every depositor would be entitled to receive a deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5 lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC).

"As per the data submitted by the bank, 95.8 per cent of the depositors are entitled to receive the full amount of their deposits from DICGC," the RBI said.

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As of August 31, 2024, DICGC has already paid Rs 9.84 crore of the total insured deposits.

Giving details behind the cancellation of the licence of The Durga Co-operative Urban Bank, the RBI said the bank does not have adequate capital and earning prospects. It has also failed to comply with the requirements of the Banking Regulation Act, 1949.

"The continuance of the bank is prejudicial to the interests of its depositors. The bank, with its present financial position, would be unable to pay its present depositors in full," it said.

Emphasising that public interest would be adversely affected if the bank is allowed to carry on its banking business any further, RBI said consequent to the cancellation of its licence, 'The Durga Co-operative Urban Bank Ltd, Vijayawada' is prohibited from conducting the business of ‘banking' with immediate effect.

Banking includes, among other things, acceptance of deposits and repayment of deposits.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)