RBI Cancels License of National Urban Cooperative Bank, Pratapgarh: What Depositors Need to Know Now
Reserve Bank Takes Drastic Action on 'National Urban Cooperative Bank Ltd., Pratapgarh'
The Reserve Bank of India (RBI) has issued a definitive order cancelling the license of 'National Urban Cooperative Bank Ltd., Pratapgarh'. This action was formally taken via an order dated April 10, 2026. Consequently, the bank immediately ceases all banking business operations as of the close of business on the same date.Furthermore, the Commissioner and Registrar of Cooperative, Uttar Pradesh, has been formally requested to issue the necessary order for the winding up of the bank. This directive also includes the appointment of a liquidator to manage the bank's cessation of activities.
Grounds Cited for License Cancellation by RBI
The RBI cited several critical deficiencies as the basis for revoking the banking license. Foremost among the concerns was the bank's lack of adequate capital and promising earning prospects.This failure meant the bank did not comply with specific provisions, notably Section 11(1) and Section 22(3)(d) read with Section 56 of the Banking Regulation Act, 1949. The regulatory body also pointed to widespread non-compliance across several sections of the BR Act, including 22(3)(a), 22(3)(b), 22(3)(c), 22(3)(d), and 22(3)(e).
Impact on Depositors and Public Interest Concerns
A primary concern highlighted by the RBI was that the continuance of the bank’s operations would be deemed prejudicial to the interests of its depositors. Moreover, the bank's current financial standing suggested an inability to pay its present depositors in full.The regulator concluded that allowing the bank to continue its banking business would adversely affect the broader public interest. As a direct result of the cancellation, the bank is prohibited from conducting any banking business, including the acceptance or repayment of deposits, with immediate effect.
Deposit Insurance and Next Steps for Account Holders
Regarding depositors, the process of receiving funds through liquidation has been clarified. Every depositor is entitled to receive a deposit insurance claim amount up to a monetary ceiling of ₹5,00,000 (Rupees five lakh only).This protection is provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC), subject to the terms of the DICGC Act, 1961. Current data indicates that approximately 99.76% of the depositors are entitled to receive the full amount of their deposits from DICGC.
As of January 20, 2026, the DICGC has already disbursed ₹14.67 crore towards the total insured deposits. These payments were processed under Section 18A of the DICGC Act, 1961, based on the willingness received from the concerned depositors of the bank.
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