License Cancelled: Monday evening brought a shocking news for thousands of account holders of Lucknow. The Reserve Bank of India (RBI) has canceled the license of HCBL Co-operative Bank. The central bank has taken this tough step in view of the poor financial condition of the bank and the lack of future prospects.
Why was the bank’s license canceled?
According to the RBI, the bank neither has sufficient capital nor any solid prospect of earning profit. It has been banned for failing to fulfill the necessary conditions under the Banking Regulation Act, 1949. The Reserve Bank has clearly stated that continuing the operation of HCBL further is not in the interest of customers and depositors.
What will happen to the customers’ money?
With the cancellation of the license, all the work of the bank has been stopped. Now customers will neither be able to deposit nor withdraw money in their accounts. However, there is no need to panic, because under the Deposit Insurance and Credit Guarantee Corporation (DICGC), an amount of up to Rs 5 lakh is safe under insurance cover.
According to the bank’s data, about 98.69% of the account holders are eligible to get their entire deposit amount. As of January 31, 2025, DICGC has already paid the insured amount of ₹21.24 crore.
What next?
RBI has directed the Co-operative Commissioner and Registrar of Uttar Pradesh to completely close the bank and appoint a liquidator, who will dispose of the assets and liabilities of the bank.
Such actions have been taken before
This is not the first time that RBI has taken action against a cooperative bank. In April 2025 also, the licenses of Color Merchants Co-operative Bank of Ahmedabad, Ajanta Urban Co-operative Bank of Aurangabad and Imperial Urban Co-operative Bank of Jalandhar were canceled.
