RBI lifts embargo on Lucknow-based urban cooperative bank

Virendra Singh Rawat

Lucknow / Dec 12, 2020

 

The Reserve Bank of India (RBI) has lifted the more than two-year old embargo on a Lucknow-based urban cooperative bank (UCB), thus allowing it to resume normal banking operations.

 

The UP Civil Secretariat Primary Cooperative Bank Limited (UPCSPCBL) had come under the RBI scanner following allegations of financial and other wrongdoings. Later, the regulator had imposed restrictions on the UCB in September 2018, which affected nearly 5,000 depositors.

 

Now, the RBI had lifted the restrictions but directed the bank management to submit a workable revival plan in six weeks.

 

Under the restrictions imposed in September 2018, the bank was barred from granting or renewing loans, making investment, incurring liability including borrowing funds and accepting fresh deposits, disbursing payment in discharge of liabilities, entering into an arrangement and selling, transferring or disposing of any of its properties or assets without prior written approval from the RBI.

 

Now the bank’s depositors are allowed to withdraw from their accounts, while the term deposits could also be liquidated only on maturity.

 

Meanwhile, UPCSPCBL depositors’ committee president Arjun Dev Bharti thanked UP chief minister Yogi Adityanath on the development and said the committee had earlier met the CM to apprise him of the matter and urged for facilitating an early resolution of the issue.

 

“The bank was subjected to the RBI restrictions owing to the financial irregularities and frauds, which caused the hard earned money of thousands of depositors and running into crores getting stuck and causing hardships to them,” he noted adding the committee was therefore constituted to protect the interests of the depositors and to revive the bank.

 

Earlier, a police case was filed against several people relating to the financial irregularities in the UCB, which occurred during the previous Akhilesh Yadav government in the state. The case was registered under relevant sections of the IPC against former managing directors of the bank apart from other senior officials.