RBI cancels Licence of Ajit Sahakari Bank Limited, Pune

Case Brief

The Reserve Bank of India cancelled the banking licence of Ajit Sahakari Bank Limited, Pune, Maharashtra, after concluding that the bank had ceased to be solvent and that all efforts to revive it had failed. RBI noted that the bank’s financial condition had sharply deteriorated, with statutory inspections showing impairment and then severe deterioration, and that the bank had not submitted any concrete revival or merger proposal. The bank’s reply to the show-cause notice under Section 22 of the Banking Regulation Act was found unsatisfactory. RBI also recalled that the bank had earlier been placed under all-inclusive directions under Section 35A with a withdrawal cap of Rs. 1,000, and that a requisition had been issued for supersession of its board. Consequent to licence cancellation, RBI requested the Registrar of Co-operative Societies, Maharashtra to initiate winding up and appoint a liquidator. The release states that depositors’ repayment would be subject to the Deposit Insurance and Credit Guarantee Corporation scheme, up to the prescribed ceiling.