Bank License Cancelled: The Reserve Bank of India (RBI) monitors all the banks in the country and when a bank violates the rules or its financial position becomes weak, the RBI takes strict action. In this episode, recently the license of Lucknow-based HBL Cooperative Bank has been canceled. This has come as a big shock to the account holders of the bank.
Why was the license of HCBL Bank canceled? [RBI Action on HCBL Bank]
According to RBI, the bank does not have enough capital and there are no prospects of earning income in the future.
For this reason, HBL Bank has been directed to stop functioning from the evening of 19 May 2025.
The Cooperative Commissioner and Registrar of Uttar Pradesh has also appointed a liquidator with the order to close the bank.
What money will the account holders get? [Depositor Refund by DICGC]
RBI has clarified that the money deposited in the bank is insured through the Deposit Insurance and Credit Guarantee Corporation (DICGC).
An amount of up to ₹5 lakh will be received by each depositor from DICGC.
98.69% of the bank’s account holders are likely to get their full deposit amount.
DICGC has already paid ₹21.24 crore so far (data as on January 31, 2025).
This process is automatically activated as per banking regulations when a bank’s license is cancelled.
What did RBI say? [Official RBI Statement]
The Reserve Bank of India says that HBL Cooperative Bank has failed to comply with the key sections of the Banking Regulation Act, 1949.
The current status of the bank is not in the interest of the depositors, hence its continuation is economically unviable.
With the cancellation of the license, the bank will no longer be able to provide any kind of deposit or withdrawal services.
