Case Brief
The Reserve Bank of India cancelled the banking licence of Mahila Nagrik Sahkari Bank Maryadit, Khargone, Madhya Pradesh after concluding that the cooperative bank had ceased to be solvent and had no viable path to revival. RBI noted that the bank’s liquidity position was severely impaired, its paid-up capital and reserves had turned negative, and deposits were fully eroded. The bank had already been placed under section 35A directions in February 2004, which restricted repayment of deposits to Rs. 1,000 per depositor, and a show-cause notice was later issued in October 2005 before the final cancellation order was delivered after business hours on May 2, 2006. RBI also requested the Registrar of Co-operative Societies, Madhya Pradesh to initiate winding-up and appoint a liquidator. The release further notes that DICGC-insured deposit repayment would follow the cancellation and liquidation process.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location