The Hyderabad Cooperative Urban Bank Ltd., Yakutpura, Hyderabad, (Andhra Pradesh)

The Reserve Bank of India cancelled the licence of The Hyderabad Cooperative Urban Bank Ltd., Yakutpura, Hyderabad, after concluding that the bank had ceased to be solvent, revival efforts in consultation with the Government of Andhra Pradesh had failed, and the interests of depositors needed protection. The release notes that the bank had earlier been placed under Section 35A directions effective August 26, 2003, prohibiting acceptance of fresh deposits, and that inspection as of March 31, 2005 showed further deterioration, with negative realizable value of paid-up capital and reserves. RBI issued a show-cause notice on September 27, 2005, but since there was no viable revival plan and revival prospects were remote, the licence was cancelled and the bank was taken into liquidation; the State Government appointed a liquidator on March 7, 2006.

The bank can no longer carry on banking business and has been placed in liquidation. Depositors will be paid only to the extent insured under the DICGC framework, up to Rs. 1,00,000 per depositor, and further recovery will depend on the liquidation process. Existing customers are affected immediately, including restrictions on deposit acceptance and repayment.