New Delhi:
The Reserve Bank of India (RBI) has canceled the license of Purvanchal Cooperative Bank, based in Ghazipur, Uttar Pradesh.
According to the RBI, the bank lacks sufficient capital and viable earning prospects.
The Cooperative Commissioner and Registrar of Cooperative Societies of Uttar Pradesh have been instructed to close the bank and appoint a liquidator.
Deposit Protection and Liquidation Process
Under the liquidation process, each depositor is entitled to receive up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
As per the data from Purvanchal Cooperative Bank, about 99.51 percent of depositors will get their entire deposit amount back through DICGC.
Reasons for License Cancellation
The central bank stated that Purvanchal Cooperative Bank is currently unable to fulfill its payment obligations to its depositors due to its weak financial position.
The RBI emphasized that allowing the bank to continue its operations would negatively impact public interest.
