Case Brief
The Reserve Bank of India cancelled the licence of Dakor Mahila Nagarik Sahakari Bank Ltd., Dakor, Gujarat, after determining that the bank had ceased to be solvent and that all revival efforts in consultation with the Government of Gujarat had failed. RBI noted deterioration in the bank’s financial condition, negative realizable value of paid-up capital and reserves, and further deterioration in asset quality, along with a liquidity crunch. Earlier, the bank had been placed under Section 35A directions effective from close of business on July 31, 2007, prohibiting acceptance of fresh deposits and fresh loans and capping repayment of deposits at Rs. 1,000 per deposit account. RBI had also issued a show-cause notice on August 16, 2007. Following the cancellation, RBI requested the Registrar of Co-operative Societies, Gujarat to initiate winding up and appoint a liquidator. The release also notes that depositors would be entitled to DICGC coverage up to Rs. 1,00,000 subject to usual terms and conditions.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location