RBI cancels licence of The MegacityCo-operative Urban Bank Ltd.
Case Brief
The Reserve Bank of India cancelled the licence of The Megacity Co-operative Urban Bank Ltd., Hyderabad, Andhra Pradesh, to carry on banking business in India. The order precludes the bank from transacting banking business under 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.
The Reserve Bank of India cancelled the licence of The Megacity Co-operative Urban Bank Ltd., Hyderabad, Andhra Pradesh, to carry on banking business in India. 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 carrying on banking business and cannot accept fresh deposits or permit withdrawals in the ordinary course. Customers and counterparties are affected because the institution is no longer authorised to operate as a bank under RBI’s licence regime.
Published as The Megacity Co-operative Urban Bank Ltd.
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