The Mahabhairab Cooperative Urban Bank Ltd., Tezpur, Assam

RBI cancelled the licence of The Mahabhairab Cooperative Urban Bank Ltd., Tezpur, Assam. The bank must stop banking business immediately and is being moved toward winding up.

The bank can no longer accept deposits, repay deposits, or otherwise conduct banking business. Depositors must rely on the liquidation process and DICGC insurance, with coverage up to ₹5 lakh per depositor subject to applicable rules; RBI has also sought winding up and appointment of a liquidator. The release states that about 99.80% of depositors are entitled to receive their full deposit amounts from DICGC, and ₹20.03 crore had already been paid as of June 13, 2024.

• Section 11(1) of the Banking Regulation Act, 1949
• Section 22(3)(d) read with Section 56 of the Banking Regulation Act, 1949
• Sections 22(3)(a), 22(3)(b), 22(3)(c), 22(3)(d) and 22(3)(e) read with Section 56 of the Banking Regulation Act, 1949

+2 more in the case brief

RBI placed The Mahabhairab Co-operative Urban Bank Ltd., Tezpur under restrictive Directions under Section 35A. The bank’s lending, investment, deposit-taking, payments, and asset disposal activities were curtailed, and withdrawals were restricted.

The bank must operate under RBI-imposed restrictions until the Directions are modified, reviewed, or expire. Depositors face withdrawal constraints, while the bank cannot expand lending, take fresh deposits, borrow, or dispose of assets without prior RBI approval. Existing depositor claims may be eligible for deposit insurance up to ₹5 lakh, subject to DICGC conditions and depositor willingness.

• Section 35 A of the Banking Regulation Act, 1949
• Section 56 of the Banking Regulation Act, 1949
• Section 18A of the DICGC Act (amendment) 2021