Case Brief
The Reserve Bank of India cancelled the banking licence of The Talod Janata Sahakara Bank Ltd., Talod (Gujarat) after concluding that the bank had ceased to be solvent and that revival was not feasible. RBI said its statutory inspection revealed multiple violations of the Banking Regulation Act, 1949 (as applicable to co-operative societies) and RBI guidelines/instructions, and that the realizable value of capital and reserves had become negative. The bank had earlier been placed under Section 35A directions with a cap on repayment of deposits, but despite a show-cause notice under Section 22, the bank’s response was found unacceptable. RBI requested the Registrar of Co-operative Societies, Gujarat to initiate winding-up and appoint a liquidator. The cancellation means the bank cannot carry on banking business, including accepting or repaying deposits, and depositors’ claims will move into the liquidation and DICGC insurance process.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location