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.

(With inputs from agencies.)