Case Brief
The Reserve Bank of India cancelled the licence granted to Shri Swaminarayan Co-operative Bank Ltd., Vadodara, Gujarat on June 2, 2005. RBI said the cancellation was due to the bank having ceased to be solvent. The release adds that earlier inspections had revealed serious deficiencies in the bank's working, including insolvency, negative net worth, negative CRAR, high NPAs and erosion of deposits. The bank had already been placed under Section 35A directions in December 2003, which precluded it from incurring fresh liabilities and restricted repayment of deposits above Rs. 1,000. Despite those directions, the bank did not improve; its reply to the subsequent show-cause notice was not satisfactory. RBI requested the Registrar of Co-operative Societies, Gujarat to initiate winding up and appoint a liquidator. Following cancellation, the bank is prohibited from carrying on banking business, including acceptance and repayment of deposits.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location