Case Brief
The Reserve Bank of India cancelled the licence of The Bharuch Nagarik Sahakari Bank Ltd., Bharuch, Gujarat on February 22, 2008. RBI said the bank had ceased to be solvent, revival efforts in consultation with the Government of Gujarat had failed, and continued uncertainty was inconveniencing depositors. The release further states that inspection showed deterioration in the bank’s financial condition, erosion of deposits, negative realizable value of paid-up capital and reserves, and further deterioration in asset quality. Earlier Section 35A directions had already restricted the bank from accepting fresh deposits, granting fresh loans, and repaying deposits beyond Rs. 1,000 per deposit account. Following cancellation, RBI requested the Registrar of Co-operative Societies, Gujarat to order winding up and appoint a liquidator, and deposit repayment will proceed subject to the Deposit Insurance Scheme.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location