The Reserve Bank of India (RBI) has revoked the license of Purvanchal Co-operative Bank Ltd., Ghazipur, Uttar Pradesh, effective from the close of business on June 15, 2024. This decision means the bank can no longer conduct banking operations.
The RBI cited several reasons for the cancellation:
- The bank lacks adequate capital and earning prospects.
- Continuing operations would be detrimental to the interests of its depositors.
- The bank is currently unable to pay its depositors in full.
- Allowing the bank to continue would negatively impact public interest.
Following the license cancellation, Purvanchal Co-operative Bank Ltd. is prohibited from conducting any banking activities, including accepting and repaying deposits, as defined under Section 5(b) of the Banking Regulation Act, 1949. The Commissioner for Cooperation and Registrar of Cooperative Societies in Uttar Pradesh has been asked to initiate the bank’s liquidation and appoint a liquidator.
Upon liquidation, depositors are entitled to receive up to ₹5,00,000 from the Deposit Insurance and Credit Guarantee Corporation (DICGC), in accordance with the DICGC Act, 1961. According to data submitted by the bank, approximately 99.51% of depositors will receive their full deposit amounts through DICGC. As of May 30, 2024, the DICGC has already disbursed ₹12.63 crore in insured deposits to eligible depositors, as per Section 18A of the DICGC Act, 1961.
