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RBI cancels licence of Maharashtra-based Bhagyodaya Friends Urban Co-operative Bank

As per the data submitted by the bank, more than 98 percent of the depositors will receive full amounts of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC), the RBI said.

April 22, 2021 / 07:17 PM IST

The Reserve Bank of India (RBI) on April 22 said it has cancelled the licence of Maharashtra-based Bhagyodaya Friends Urban Co-operative Bank Limited due to inadequate capital.

"Consequently, the bank ceases to carry on banking business, with effect from the close of business on April 22, 2021. The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank," the RBI said.

The Reserve Bank cancelled the licence of the bank as it does not have adequate capital and earning prospects, the RBI said. The bank has failed to comply with the requirements and the continuance of the bank is prejudicial to the interests of its depositors, the RBI said.

According to the regulator, the bank with its present financial position would be unable to pay its present depositors in full and public interest would be adversely affected if the bank is allowed to carry on its banking business any further.

"Consequent to the cancellation of its licence, Bhagyodaya Friends Urban Co-operative Bank Limited, Warud, Dist. Amravati, Maharashtra is prohibited from conducting the business of ‘banking’ which includes acceptance of deposits and repayment of deposits," the RBI said.

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As per the data submitted by the bank, more than 98 percent of the depositors will receive full amounts of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC), the RBI said.

"On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5 lakhs from the DICGC subject to the provisions of the DICGC Act, 1961, the RBI said.
Moneycontrol News
first published: Apr 22, 2021 07:14 pm

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