RBI Cancels Lucknow based HCBL Co-operative Bank Licence Over Capital Shortfall; will customers get deposit amount refund?
New Delhi, 20 May 2025: Reserve Bank of India (RBI) has cancelled the banking licence of HCBL Co-operative Bank Ltd, based in Lucknow, with immediate effect. RBI announced the decision on May 20, citing the bank’s failure to maintain adequate capital and its lack of earning prospects as key reasons behind the cancellation.
According to the Reserve Bank of India, HCBL Co-operative Bank does not have sufficient capital and earning potential to continue banking operations. The bank’s current financial situation was found to be unsustainable, and it was unable to comply with the provisions of Section 11(1) and Section 22(3)(d) read with Section 56 of the Banking Regulation Act, 1949.
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The RBI also noted that the bank’s continuance would be detrimental to the interests of its depositors.
With the license canceled, the bank is now restricted from doing any form of banking business, including new desposits and withdrawals from customers.
However, the RBI has assured that depositors will receive their insured amount through the Deposit Insurance and Credit Guarantee Corporation (DICGC), which provides insurance cover of up to ₹5 lakh per depositor. As per data submitted by HCBL Co-operative Bank, over 99% of depositors are expected to receive their full deposits from the DICGC.
The Commissioner and Registrar of Co-operative Societies, Uttar Pradesh, has also been requested to issue an order for winding up the bank and appoint a liquidator. This marks another step in the RBI’s continued efforts to protect depositors and maintain stability in the cooperative banking sector.
The RBI has been tightening its regulatory grip on weaker co-operative banks in recent years, particularly following several cases of mismanagement and financial instability. The cancellation of HCBL Co-operative Bank’s licence shows the importance of RBI to maintain trust and regulations in the Indian Banking & financial system.
