Licence of Siddhpur Commercial Co-operative Bank Ltd., Siddhpur – Cancelled

Case Brief

The Reserve Bank of India cancelled the licence of Siddhpur Commercial Co-operative Bank Ltd., Siddhpur, Gujarat, after determining that the bank had ceased to be solvent and that its revival was not feasible. Earlier statutory inspections had shown an impaired and worsening financial position, and RBI had already imposed Section 35A restrictions from August 21, 2008. Following the bank's unsatisfactory response to the show-cause notice and the absence of any viable turnaround proposal, RBI cancelled the licence and requested the Registrar of Co-operative Societies, Gujarat to initiate winding-up proceedings and appoint a liquidator. The bank is thereafter barred from conducting banking business, including accepting and repaying deposits, and depositors' claims are to be handled under the DICGC framework subject to applicable terms and limits.