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Govt may table amendment to DICGC Act in monsoon session
In a bid to ensure timely support to depositors of stressed banks, the government may bring amendment to DICGC Act in the monsoon session with the objective to provide account holders easy and time-bound access to funds to the extent of the deposit insurance cover.
Last year, the government raised insurance cover on deposit five-folds to Rs 5 lakh with a view to provide support to depositors of ailing lenders like Punjab and Maharashtra Co-operative (PMC) Bank. Following the collapse of PMC Bank, Yes Bank and Lakshmi Vilas Bank too came under stress leading to restructuring by the regulator and the government.
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The Reserve Bank of India (RBI) has cancelled banking license of Bagnan, West Bengal-basdd United Co-operative Bank Ltd, due to poor financial condition.
However, RBI says, all the depositors will receive full amount of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC).
Consequently, the bank ceases to carry on banking business, with effect from the close of business on 13 May 2021. The registrar of cooperative societies, West Bengal has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank, the RBI says in a release.
The banking regulator cancelled the license of the bank since the 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 RBI said.
RBI logo. | Photo Credit: REUTERS
The bank ceases to carry on banking business, with effect from the close of business on May 13, 2021. The Reserve Bank of India on Thursday said it has cancelled the licence of United Co-operative Bank Ltd, Bagnan, West Bengal, as it does not have adequate capital and earning prospects. Consequently, the bank ceases to carry on banking business, with effect from the close of business on May 13, 2021, the Reserve Bank of India said in a statement.
“As per the data submitted by the bank, all the depositors will receive full amount of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC),” it said.
RBI cancels licence of United Co-op Bank; says UCB has no capital left
Continuance of UCB prejudicial to interests of depositors: RBI
The Reserve Bank of India has cancelled the licence of United Co-operative Bank which is based in Bagnan, West Bengal. The RBI cancelled its licence as the UCB does not have adequate capital and earning prospects.
In a press release RBI said “Consequently, the bank ceases to carry on banking business, with effect from the close of business on May 13, 2021.”
The Registrar of Cooperative Societies, West Bengal has also been asked to issue an order for winding up the bank and appoint a liquidator for the bank.
Highlights
The bank would not be able to pay its depositors the full amount.
The bank is now prohibited from conducting the business of ‘banking’.
The Reserve Bank of India has cancelled the license of Bagnan, United Co-operative Bank Ltd, West Bengal. The Central bank has taken the decision after it found that the bank doesn’t have adequate capital and earning prospects, RBI said in an order dated May 10, 2021.
Depositors don’t need to worry much, as they will receive the full amount of their deposits, thanks to the Deposit Insurance and Credit Guarantee Corporation (DICGC). However, depositors are entitled to receive claim benefits of up to Rs 5 lakh.