The Reserve Bank of India (RBI) has cancelled the license of another bank. The RBI said on Monday that the bank has stopped functioning from the evening of May 19.
Another bank customer is in big trouble. The Reserve Bank of India (RBI) has taken a big action. The RBI has announced the cancellation of the license of a cooperative bank. In fact, the RBI has cancelled the license of Lucknow’s HCBL Co-operative Bank. The central bank said that the bank does not have sufficient capital and earning potential, due to which its license has been cancelled. The RBI said in a statement on Monday (May 19) that the HCBL Co-operative Bank has stopped functioning from the evening of May 19.
The Cooperative Commissioner and Registrar, Uttar Pradesh has also been requested to issue an order to close the bank and appoint a liquidator for the bank. On liquidation, each depositor will be entitled to receive the deposit insurance claim amount on their deposits up to Rs 5 lakh from DICGC. RBI said that as per the bank’s data, 98.69 per cent depositors are entitled to receive the full amount of their deposits from DICGC. DICGC has already paid Rs 21.24 crore out of the total insured deposits as on January 31, 2025.
Bank failed to comply with rules
RBI said that the bank has failed to comply with the requirements of certain sections of the Cooperative Banking Regulation Act, 1949 and the continuation of the bank is not in the interest of its depositors. As a result of the cancellation of license, HCBL Cooperative Bank has been stopped from carrying on banking operations including deposits and withdrawals with immediate effect.
If a bank collapses, up to Rs 5 lakh is safe
Let us tell you that in the event of a bank collapse or bankruptcy, the only relief available to the depositor is the insurance cover provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC). Under DICGC, insurance cover up to Rs 5 lakh is available. No matter how much money is deposited in all your accounts with the same bank, you will get insurance cover of only Rs 5 lakh. This amount includes both principal and interest.
