The Reserve Bank of India (RBI) has cancelled the licence of Urban Co-operative Bank (UCB), Sitapur, Uttar Pradesh.

RBI said the bank ceases to carry on banking business, with effect from the close of business on December 07, 2023.

The Commissioner and Registrar of Cooperative, Uttar Pradesh has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank.

On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of ₹5 lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC).

As per the data submitted by the bank, 98.32 per cent of the depositors are entitled to receive full amount of their deposits from DICGC, RBI said.

The central bank said: “The bank does not have adequate capital and earning prospects….The continuance of the bank is prejudicial to the interests of its depositors

“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.”