Licence of Sant Janabai Nagari Sahakari Bank Ltd, Gangakhed, Parbhani Cancelled

Case Brief

The Reserve Bank of India cancelled the licence of Sant Janabai Nagari Sahakari Bank Ltd., Gangakhed, Parbhani, Maharashtra, on 5 September 2008. RBI said the bank had ceased to be solvent, earlier revival efforts with the Government of Maharashtra had failed, and the bank’s financial condition showed no scope for turnaround. The bank had previously been placed under Section 35A directions restricting operations and prohibiting withdrawals above Rs 500 because of its adverse liquidity position, but it failed to improve. RBI also initiated winding-up proceedings by requisitioning the Commissioner for Co-operation and Registrar of Co-operative Societies, Maharashtra, to issue an order for winding up and appoint a liquidator. After the cancellation, the bank was prohibited from carrying on banking business, including acceptance and repayment of deposits.