The RBI on Wednesday said it has cancelled the licence of Tezpur-based The Mahabhairab Cooperative Urban Bank due to its deteriorating financial condition. Following the cancellation of its licence, the cooperative bank ceases to carry on banking business, with effect from the close of business on July 24, 2024.

In a statement, the Reserve Bank of India (RBI) said the Registrar of Cooperative Societies, Assam has also been requested to issue an order for winding up the bank and appoint a liquidator.

Giving reason for the cancellation of the licence, RBI said the lender does not have adequate capital and earning prospects.

“The bank with its present financial position would be unable to pay its present depositors in full,” it said adding that continuance of the bank is prejudicial to the interests of its depositors.

On liquidation, every depositor would be entitled to receive insurance claim amount of his/her deposits up to Rs 5 lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC).

RBI said as per the data submitted by the cooperative bank, about 99.8 per cent of the depositors are entitled to receive the full amount of their deposits from DICGC.

As on June 13, 2024, DICGC has already paid Rs 20.03 crore of the total insured deposits.

(This story has not been edited by News18 staff and is published from a syndicated news agency feed – PTI)