RBI cancels licence of Lucknow-based HCBL Co-op Bank; Is your money safe? here's what you need to know

The Reserve Bank of India (RBI) on Monday cancelled the licence of HCBL Co-operative Bank Ltd., Lucknow, citing inadequate capital, poor earnings prospects, and a threat to depositors’ interests.

The RBI said that the bank ceases to carry on banking business, including acceptance and repayment of deposits, from the close of business on May 19, 2025.

The regulator stated that HCBL Co-operative Bank does not have adequate capital and earning prospects and has failed to comply with several provisions of the Banking Regulation Act, 1949.

Its continued operation was found to be detrimental to the interest of depositors.

"The bank with its present financial position would be unable to pay its present depositors in full," the RBI noted, adding that public interest would be adversely affected if it was allowed to carry on its banking business.

The Commissioner and Registrar of Cooperative, Uttar Pradesh, has been requested to issue an order for winding up the bank and appoint a liquidator.

As per the data submitted by the bank, 98.69% of the depositors are entitled to receive the full amount of their deposits under the Deposit Insurance and Credit Guarantee Corporation (DICGC) insurance scheme, which provides coverage up to ₹5 lakh per depositor.

The DICGC has already disbursed ₹21.24 crore to eligible depositors as of January 31, 2025, based on the willingness received from the concerned depositors of the bank.

In February, the RBI imposed several restrictions on Mumbai-based New India Co-operative Bank, including on the withdrawal of funds by depositors, amid supervisory concerns.

The regulatory actions came after concerns were raised over the bank’s financial health and governance. The bank was barred from granting loans, making investments, accepting fresh deposits, or disbursing payments without prior RBI approval under Section 35A read with Section 56 of the Banking Regulation Act, 1949.

The RBI later permitted depositors of the crisis-hit co-operative bank to withdraw up to ₹25,000 from their accounts.