The Reserve Bank of India on Friday said it has scrapped the lending licence of Lucknow Urban Co-operative Bank as the lender does not have sufficient capital and earnings prospects.
The Governor of Uttar Pradesh has also been asked to issue an order for the bank to wind up and appoint a liquidator, the Reserve Bank said.
If liquidation is made, every depositor shall be entitled to receive a deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5 lakh from Deposit Insurance and Credit Guarantee Corporation.
According to the data provided by the bank, 99.53 percent of depositors are entitled to receive the full amount of their deposits from DICGC, the RBI said.
The Central Bank said that Lucknow Urban Co-operative Bank does not have sufficient capital and earning prospects.
The bank has been banned from doing the banking business, which includes accepting deposits and repaying deposits with immediate effect.