Licence of Shree Vardhaman Co-operative Bank Ltd., Bhavnagar – Cancelled

Case Brief

The Reserve Bank of India cancelled the licence of Shree Vardhaman Co-operative Bank Ltd., Bhavnagar, effective after close of business on November 20, 2008. RBI said the bank had ceased to be solvent, its financial condition had deteriorated further after earlier inspection findings, and all efforts to revive it in consultation with the Government of Gujarat had failed. The bank had also been issued Section 35A directions restricting operations from November 20, 2006. RBI concluded that the bank had no viable revival plan and that the possibility of turnaround was remote, so it took the extreme step of cancelling the licence in the interest of depositors. RBI requested the Registrar of Co-operative Societies, Gujarat to order winding up and appoint a liquidator.