DICGC: Giving information about the cancellation of the license from RBI, it was told that the bank does not have sufficient capital and earning potential. Due to this, the bank will not be able to do banking business after the closure of business on 19 May 2025.
Why RBI Cancels HCBL Bank Licence?: The Reserve Bank of India (RBI) keeps taking penalty and other action from time to time for not following the rules. Recently, RBI had also imposed fines on big banks like SBI and PNB. Now the Reserve Bank has canceled the license of HCBL Co-operative Bank of Lucknow. This is the second bank in a month on which the central bank has taken action to cancel the license. Giving the reason for canceling the license from RBI, it was told that the bank does not have sufficient capital and earning potential. Due to this, the bank will not be able to do banking business after the closure of business on May 19, 2025.
Process of closing the bank started
RBI has asked the Cooperative Commissioner and Registrar of Uttar Pradesh to order the closure of the bank and appoint a liquidator. On closure of the bank, every depositor will get insurance claim of up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC). According to RBI, 98.69% of the bank’s depositors will be able to get their entire deposit amount from DICGC. As of January 31, 2025, DICGC has already made a payment of Rs 21.24 crore.
Violation of rules and poor financial condition
RBI said that HBL Bank did not follow some rules of the Banking Regulation Act, 1949. The current financial position of the bank is such that it cannot pay the full amount to its depositors. If the bank is allowed to do business further, it will prove to be harmful in the interest of the public.
And which bank’s license was canceled?
After the cancellation of the license, HCBL Co-operative Bank has been ordered to stop banking operations with immediate effect, such as accepting deposits and returning deposits. Last month, on April 16, 2025, RBI canceled the license of Color Merchants Co-op Bank of Ahmedabad. The reason for cancellation of the license of this bank was also cited as insufficient capital and low earning potential.
Licenses of these banks canceled last year
A few months ago, on November 12, 2024, the license of Durga Co-operative Urban Bank of Vijayawada was also canceled by the Reserve Bank. The reason for cancelling the bank’s license was said to be insufficient capital and no earning potential. The license of Banaras Mercantile Co-operative Bank was canceled by the Reserve Bank on 4 July 2024. The reason for its closure was almost the same as that for closing other banks.
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