The Reserve Bank of India has cancelled the license of Bagnan, United Co-operative Bank Limited, West Bengal due to lack of adequate capital and earning prospects. The order was issued by RBI on May 10,2021.
In the statement, the apex bank said that considering the current situation of the bank, it would not be able to pay its depositors the full amount of their deposits. So, the process of liquidation has to begin. The bank is now prohibited from conducting any ‘banking’ functions which included accepting deposits or giving out credits. “The continuation of the bank is prejudicial to the interests of its depositors,” stated the RBI.
The central bank ensured that the depositors won’t have to worry as they will be take care of. They will receive full amount of their deposits because of the Deposit Insurance and Credit Guarantee Corporation (DIGCI). They are entitled to receive up to Rs. 5 Lakh.
The bank has received an order for winding up the business of the bank and appoint liquidator as soon as possible.
“The public interest would be adversely affected if the bank is allowed to carry out its banking business any further,” said RBI on a statement issued on May 13.