Licence of Shri B.J.Khatal Janata Sahakari Bank Ltd., Sangamner, Cancelled

Case Brief

The Reserve Bank of India cancelled the licence of Shri B.J.Khatal Janata Sahakari Bank Ltd., Sangamner, Maharashtra, after the close of business on June 11, 2008. RBI said the bank had ceased to be solvent, revival efforts had failed, and the bank had no viable plan to turn around or satisfy regulatory requirements. The release also recounts earlier supervisory findings that the bank’s financial position was impaired and later precarious, leading to restrictions on fresh deposits, premature withdrawals, fresh advances, and Section 35A directions that capped withdrawals at Rs. 1,000. Following cancellation, RBI asked the Registrar of Co-operative Societies, Maharashtra to order winding up and appoint a liquidator. As a result, the bank is barred from carrying on banking business, including acceptance and repayment of deposits, and depositors will be paid subject to the Deposit Insurance Scheme terms and conditions.