The Reserve Bank of India (RBI) has cancelled the banking licence of Lucknow Urban Co-operative Bank due to the lender having inadequate capital and earning prospects. 

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

On liquidation, every depositor would be entitled to receive a deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5 lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC).

As per the data submitted by the bank, 99.53% of the depositors are entitled to receive the full amount of their deposits from DICGC, the RBI said

"The bank with its present financial position would be unable to pay its present depositors in full," it said, adding public interest would be adversely affected if the bank is allowed to carry on its banking business any further.

Consequent to the cancellation of its licence, the bank has been prohibited from conducting the business of 'banking', which includes, among other things, acceptance of deposits and repayment of deposits with immediate effect.