RBI revokes license of Deccan Urban Co-operative Bank

19 Aug 2022 , 08:30 AM

Deccan Urban Co-operative Bank’s license has been revoked, according to the Reserve Bank of India, since the institution lacks sufficient capital and growth potential.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 (DICGC), according to information provided by the bank, the central bank stated in a release.

The cooperative bank stops conducting banking operations as of Thursday’s conclusion of business.

The RBI announced the license termination and stated that “the bank does not have adequate capital and earning prospects.”

Additionally, it stated that given its current financial situation, the Vijayapur-based bank wouldn’t be able to fully reimburse its current depositors.

In order to wind up the bank and appoint a liquidator, the RBI has asked the Commissioner for Cooperation and Registrar of Cooperative Societies in Karnataka to issue an order.

Every depositor will be eligible to receive the deposit insurance claim amount of their deposits, up to Rs5 lakh DICGC, upon liquidation.

Of the entire insured deposits, the DICGC had already paid out Rs13.07 crore as of August 6, 2022.

The RBI stated in a separate statement that Obopay Mobile Technology India Private Limited has been fined Rs5,93,000 for failing to comply with certain requirements of the Know Your Customer and Prepaid Payment Instruments (PPIs) standards (KYC).

The penalty, according to the central bank, is based on shortcomings in regulatory compliance and is not meant to judge the legality of any deal that the firm made with its clients.