Case Brief
RBI ordered the cancellation of the licence of Shri S.K.Patil Co-operative Bank Ltd., Kurundwad, District Kolhapur, Maharashtra, effective after close of business on October 25, 2008. The bank’s financial condition had deteriorated across successive inspections, RBI had already issued Section 35A directions restricting operations and capping withdrawals at Rs. 1,000, and a show-cause notice had been issued asking why the licence should not be cancelled. RBI said the bank had ceased to be solvent, revival efforts with the Government of Maharashtra had failed, and no viable turnaround plan existed. RBI therefore cancelled the licence in the interest of depositors and requested the Registrar of Co-operative Societies, Maharashtra to initiate winding up and appoint a liquidator. Consequent to cancellation, the bank cannot carry on banking business, including acceptance and repayment of deposits, and depositors’ repayment will proceed subject to deposit insurance terms and liquidation process.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location