Case Brief
The Reserve Bank of India cancelled the licence of The Bharat Mercantile Co-operative Urban Bank Limited, Hyderabad (Andhra Pradesh), after concluding that the bank had ceased to be solvent and that revival efforts had failed. RBI noted that statutory inspections had found non-compliance with several provisions of the Banking Regulation Act, 1949 (as applicable to co-operative societies), violations of RBI guidelines/instructions, deterioration in the bank's financial condition, and mismanagement of affairs by the Board of Directors. The bank had earlier been placed under directions under Section 35A, and the Registrar of Co-operative Societies later superseded its Board. RBI also issued a show-cause notice before deciding that the chances of revival were remote. Following cancellation, the bank was requested to be wound up and a liquidator appointed, and it was prohibited from carrying on banking business, including acceptance and repayment of deposits.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location