Case Brief
The Reserve Bank of India cancelled the licence of The Maratha Co-operative Bank Ltd., Hubli, Karnataka after determining that the bank had ceased to be solvent and that all efforts to revive it in consultation with the Government of Karnataka had failed. RBI cited repeated inspections showing a worsening financial position, very high gross and net NPAs, liquidity stress, inability to pay matured deposits, and erosion of deposits/capital, including negative realisable value of paid-up capital and reserves. A show-cause notice had been issued earlier, and after considering the bank’s reply and subsequent inspection findings, RBI took the extreme step of cancelling the licence in the interest of depositors. The Registrar of Co-operative Societies, Karnataka was also requested to commence winding up and appoint a liquidator. Consequent to the cancellation, the bank is prohibited from carrying on banking business, including acceptance and repayment of deposits, and DICGC-insured deposit repayment will be triggered through liquidation.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location