RBI cancels licence of The Praja Co-operative Urban Bank Ltd.
Case Brief
The Reserve Bank of India cancelled the banking licence of The Praja Co-operative Urban Bank Ltd., Secunderabad, Ranga Reddy Dist. (Andhra Pradesh). The order precludes the bank from carrying on banking business under the Banking Regulation Act, 1949 (as applicable to co-operative societies), and specifically bars it from accepting public deposits or permitting withdrawals by cheque, draft, order or otherwise.
The Reserve Bank of India cancelled the licence granted to The Praja Co-operative Urban Bank Ltd., Secunderabad, Ranga Reddy Dist. (Andhra Pradesh), to carry on banking business. As a result, the bank is precluded from transacting the business of banking as defined in the Banking Regulation Act, 1949 (as applicable to co-operative societies), including accepting deposits from the public and allowing withdrawals by cheque, draft, order or otherwise.
Severity Assessment
Licence cancellation is a full operating prohibition and is always severity 5.
The bank must stop all banking business activities. Depositors can no longer make fresh deposits or withdraw funds through normal banking instruments, and the institution cannot legally operate as a bank going forward.
Published as The Praja Co-operative Urban Bank Ltd.
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