Case Brief
The Reserve Bank of India cancelled the licence of The Onake Obavva Mahila Co-operative Bank Ltd., Chitradurga (Karnataka), after finding the bank had ceased to be solvent and that all revival efforts had failed. The release says the bank had severe liquidity problems, negative realizable capital and reserves, and progressive erosion of deposits. RBI had previously placed the bank under Section 35A directions effective September 11, 2003, restricting withdrawals to Rs. 1,000 per depositor. Following further inspections and a show-cause process, RBI concluded that the bank's revival prospects were remote and ordered licence cancellation after close of business on May 12, 2006. The Registrar of Co-operative Societies, Karnataka was requested to initiate winding-up and appoint a liquidator, and insured depositor repayments under DICGC were to be set in motion.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location