Case Brief
On 22 January 2009, the Reserve Bank of India cancelled the licence of Sadhana Co-operative Bank Ltd., Ichalkaranji, District Kolhapur, Maharashtra. RBI said the bank had ceased to be solvent, earlier efforts to revive it in close consultation with the Government of Maharashtra had failed, and the ongoing uncertainty was inconveniencing depositors. RBI had earlier imposed all-inclusive directions under Section 35A on 4 September 2008, including a ban on fresh deposits and further lending and a cap on deposit repayment. After examining the bank’s reply to the show-cause notice, RBI found it unsatisfactory and decided to cancel the licence. RBI also requested the Registrar of Co-operative Societies, Maharashtra to initiate winding-up and appoint a liquidator. Following the cancellation, the bank is prohibited from carrying on banking business, including acceptance and repayment of deposits, and depositor claims will proceed under the Deposit Insurance Scheme subject to applicable terms and limits.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location