Case Brief
The Reserve Bank of India cancelled the licence of The Akot Urban Co-operative Bank Ltd., Akot, Maharashtra, after finding that the bank had ceased to be solvent, had negative net worth, and that revival attempts had failed. A statutory inspection found violations of provisions of the Banking Regulation Act, 1949 (as applicable to cooperative societies) and RBI guidelines/instructions. RBI had earlier placed the bank under Section 35A directions prohibiting it from incurring any liability, and later issued a show-cause notice; the reply was not accepted. Consequent to the cancellation, RBI requested winding-up proceedings and stated that the bank is prohibited from carrying on banking business, including acceptance and repayment of deposits.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location