Case Brief
The Reserve Bank of India cancelled the licence of The Anubhav Co-operative Bank Ltd., Basavakalyan, Karnataka after determining that the bank had ceased to be solvent and that revival efforts undertaken in consultation with the Government of Karnataka had failed. RBI said the action was taken in the interest of depositors, noting that a statutory inspection had revealed severe deterioration in the bank’s financial position, 73.6% erosion of deposits, severe liquidity problems, heavy borrowing, and inability to meet all depositor commitments. The bank had earlier been placed under Section 35A directions on January 23, 2008, restricting its operations and capping withdrawals at Rs.500 per depositor. Following the cancellation, the Registrar of Co-operative Societies, Karnataka was asked to initiate winding up and appoint a liquidator; the bank is prohibited from carrying on banking business, including acceptance and repayment of deposits.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location