Case Brief
The Reserve Bank of India cancelled the licence of The Sarvodaya Nagrik Sahakari Bank Ltd., Visnagar, Gujarat, on February 02, 2007. RBI said the bank had ceased to be solvent, revival attempts in consultation with the Government of Gujarat had failed, and the bank’s precarious financial position had worsened despite being under Section 35A directions since January 03, 2004. An inspection as of March 31, 2006 showed deterioration in financial condition, erosion of deposits, and negative realisable value of paid-up capital and reserves. After a show-cause notice dated November 13, 2006 and finding no viable revival plan, RBI took the extreme step of cancelling the licence and requested the Registrar of Co-operative Societies, Gujarat to wind up the bank and appoint a liquidator. The release also notes that depositors would be eligible for insurance cover up to Rs. 1,00,000 under DICGC in liquidation.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location