RBI cancels license of Kanpur-based People's Co-operative Bank Ltd

The Reserve Bank of India on Monday cancelled the license of Kanpur-based People's Co-operative Bank Limited as it does not have adequate capital and earning prospects.

The Commissioner for Cooperation and Registrar of Cooperative Societies, Uttar Pradesh, has also been requested to issue an order for winding up the bank and appoint a liquidator for the lender, RBI said in a statement.

On liquidation, every depositor would be entitled to receive deposit insurance claim of up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC).

As per the data submitted by the bank, more than 99 percent of the depositors are entitled to receive full amount of their deposits from the DICGC, the central bank said.

RBI said that People's Co-operative Bank does not have adequate capital and earning prospects, and it has failed to comply with the requirements the Banking Regulation Act, 1949.

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

Consequent to the cancellation of its license, People's Co-operative Bank is prohibited from conducting the business of 'banking', which includes acceptance and repayment of deposits, with immediate effect, it said.

As on February 14, 2022, DICGC has sanctioned Rs 6.97 crore of the total insured deposits based on the willingness received from the depositors of the bank.