Case Brief
The Reserve Bank of India cancelled the banking licence of Sri Sampige Siddeswara Urban Co-operative Bank Ltd., Chitradurga, Karnataka, after finding that the bank had become insolvent and that revival efforts had failed. Earlier inspections showed a worsening financial position, and the bank had been under Section 35A directions since 18 June 2005 limiting its activities and capping repayment of deposits at Rs. 1,000 per depositor. RBI had issued a show-cause notice on 1 February 2006, but the bank did not respond. Based on these facts, RBI concluded that continued operation would be detrimental to depositors and cancelled the licence with effect from the close of business on 26 July 2006. RBI also asked the Registrar of Co-operative Societies, Karnataka to initiate winding up and appoint a liquidator.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location