Reserve Bank Cancels the Licence of The Rahuta Union Co-operative Bank Ltd., 24 Parganas (North), West Bengal

Case Brief

The Reserve Bank of India cancelled the licence of The Rahuta Union Co-operative Bank Ltd., 24 Parganas (North), West Bengal under Section 22 of the Banking Regulation Act, 1949 (AACS). RBI said the bank had ceased to be solvent, revival efforts with the Government of West Bengal had failed, and depositors were being inconvenienced by prolonged uncertainty. The release describes worsening financial condition in statutory inspections, negative realizable value of paid-up capital and reserves, and further deterioration over time. The bank had earlier been placed under Section 35A directions restricting acceptance of term deposits and fresh advances, and later under further directions capping withdrawals at Rs.1000 per depositor. RBI issued a show-cause notice, found no viable revival plan, and cancelled the licence as a final step. It also requested the Registrar of Co-operative Societies, West Bengal to order winding up and appoint a liquidator, and noted that depositors would be entitled to DICGC coverage up to Rs.1,00,000 subject to usual terms.