RBI Cancels License of The Mahabhairab Co-Co-Operative bankoperative Urban Bank Ltd., Tezpur, Assam
The RBI, through an order dated July 23, 2024, has revoked the license of “The Mahabhairab Cooperative Urban Bank Ltd., Tezpur, Assam.” As a result, the bank will cease all banking operations effective at the close of business on July 24, 2024. Additionally, the Registrar of Cooperative Societies, Assam, has been requested to issue a winding-up order for the bank and appoint a liquidator.
The RBI canceled the bank’s license due to several reasons:
- Inadequate Capital and Earning Prospects: The bank lacks adequate capital and earning prospects.
2. Non-Compliance with Regulatory Requirements: The bank has not met the requirements of Sections 22(3)(a), 22(3)(b), 22(3)(c), 22(3)(d), and 22(3)(e), read with Section 56 of the Banking Regulation Act, 1949.
3. Detriment to Depositors’ Interests: The bank’s continued operation is detrimental to the interests of its depositors.
4. Inability to Fulfill Depositor Obligations: With its current financial position, the bank would be unable to fully repay its depositors.
5. Public Interest Concerns: Allowing the bank to continue its banking operations would adversely affect the public interest.
As a consequence of the license cancellation, “The Mahabhairab Cooperative Urban Bank Ltd., Tezpur, Assam” is prohibited from conducting any banking activities. This includes the acceptance and repayment of deposits as defined in Section 5(b), read with Section 56 of the Banking Regulation Act, 1949, effective immediately.
The RBI
Upon liquidation, each depositor will be entitled to receive a deposit insurance claim of up to ₹5,00,000 (Rupees five lakh only) from the Deposit Insurance and Credit Guarantee Corporation (DICGC), subject to the provisions of the DICGC Act, 1961. According to the bank’s submitted data, approximately 99.80% of depositors are eligible to receive the full amount of their deposits from DICGC. As of June 13, 2024, DICGC has already disbursed ₹20.03 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961, based on the willingness received from the concerned depositors.
