Reserve Bank Cancels the Licence of Yashwant Urban Co-operative Bank Ltd., Parbhani, (Maharashtra)

Case Brief

RBI cancelled the banking licence of Yashwant Urban Co-operative Bank Ltd., Parbhani, Maharashtra after concluding that the bank had ceased to be solvent and that efforts to revive it in consultation with the Government of Maharashtra had failed. The release says the statutory inspection revealed non-compliance with several provisions of the Banking Regulation Act, 1949 (as applicable to co-operative societies) and that the bank's financial position had become precarious, with negative realizable value of paid-up capital and reserves. RBI had previously placed the bank under Section 35A directions restricting it from incurring any liability, and a show-cause notice under Section 22 was issued; the bank's reply was found unacceptable. Following the cancellation, the Registrar of Co-operative Societies, Maharashtra was requested to initiate winding up and appoint a liquidator.