Deccan Urban Co-operative Bank’s license has been revoked, according to the Reserve Bank of India, because the institution lacks capital and growth potential. More than 98% of depositors are eligible to collect the full value of their savings from the Deposit Insurance and Credit Guarantee Corporation (DIGCC), according to information provided by the bank, the central bank said in a statement. .
The cooperative bank ceases to carry out banking operations from the close of business on Thursday.
The RBI announced the termination of the license and said that “the bank does not have adequate capital and revenue prospects”.
Further, he said that given its current financial condition, the Vijayapur-based bank would not be able to repay its current depositors in full.
In order to liquidate the bank and appoint a liquidator, the RBI requested the Cooperation Commissioner and Registrar of Cooperative Societies of Karnataka to issue an order.
Each depositor will be eligible to receive the deposit insurance claim amount of their deposits, up to Rs5 lakh DICGC, upon liquidation.
Out of all insured deposits, the DICGC had already paid out Rs 13.07 crore as of August 6, 2022.
The RBI said in a separate statement that Obopay Mobile Technology India Private Limited was fined Rs 5,93,000 for failing to meet certain Know Your Customer and Prepaid Payment Instruments (PPI) (KYC) requirements.
The sanction, according to the central bank, is based on shortcomings in regulatory compliance and is not intended to judge the legality of any transaction the company has entered into with its customers.