RBI Revokes HCBL Co-operative Bank's License Over Financial Instability

The Reserve Bank of India has canceled the license of Lucknow-based HCBL Co-operative Bank, citing insufficient capital and poor earning prospects. The move halts the bank's operations, and a liquidator will be appointed. Most depositors are insured up to Rs 5 lakh, facilitating their reimbursement.

The Reserve Bank of India (RBI) has officially revoked the license of HCBL Co-operative Bank based in Lucknow due to its inadequate capital and bleak earning prospects. This decision terminates the bank's ability to continue its banking operations, effective May 19.

According to a statement from the RBI, the Commissioner and Registrar of Cooperative, Uttar Pradesh, has been requested to initiate the bank's winding-up process and appoint a liquidator. This step ensures depositor insurance claims of up to Rs 5 lakh each, with nearly 98.69% of depositors eligible for a full reimbursement.

The RBI noted that HCBL Co-operative Bank's non-compliance with the Banking Regulation Act, 1949, has jeopardized depositor interests. Therefore, the bank is prohibited from conducting any further banking activities, including deposit acceptance and repayment.