The Reserve Bank of India (RBI) has canceled the license of Vaishali Urban Development Co-operative Bank Limited (Hajipur). The RBI has canceled the license of Vaishali Urban Development Cooperative Bank Limited under the order of 27 December.
As a result, the bank has stopped doing banking business from the close of business on 30 December 2024. The Registrar of Cooperative Societies (Bihar) has also been requested to issue an order to close the bank and appoint a liquidator (assessment officer) for the bank. According to the information received, the bank does not have adequate capital and earning prospects. In this way it does not comply with the provisions of the Banking Regulation Act.
Apart from this, the bank has failed to comply with the requirements of the Act. Reserve Bank Chief General Manager Puneet Pancholi said that the continuation of the bank is contrary to the interests of its depositors. Due to this, the bank will be unable to make full payment to its current depositors due to its current financial position and if the bank is allowed to continue its banking business, it will adversely affect the public interest.
He said that as a result of cancellation of the license, the bank is prohibited from doing the business of banking, including accepting deposits and refunding deposits, with immediate effect. The Chief General Manager said that every depositor shall be entitled to receive deposit insurance claim amount of his deposits up to an amount of Rs five lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC) under the provisions of the DICGC Act, 1961. As per the data submitted by the bank, 98.47 per cent of the depositors are entitled to receive the full amount of their deposits from DICGC.
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