Case Brief
The Reserve Bank of India cancelled the banking licence of The Hirekerur Urban Co-operative Bank Ltd., Hirekerur, Karnataka, after concluding that the bank had ceased to be solvent and that efforts to revive it had failed. RBI had earlier placed the bank under Section 35A directions restricting its operations, including a cap of Rs. 500 on withdrawals, and later inspections showed further deterioration in its financial position as well as violations of RBI directions. After an unsatisfactory reply to a show-cause notice issued on 25 June 2007, RBI decided to cancel the licence in the interest of depositors. The Registrar of Co-operative Societies, Karnataka has been requested to order winding up and appoint a liquidator; depositors may receive insured amounts up to the DICGC ceiling on liquidation.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location