Case Brief
The Reserve Bank of India cancelled the licence of Shri Parola Urban Co operative Bank Ltd., Parola, District Jalgaon, Maharashtra with effect after close of business on July 10, 2009. RBI said the bank had ceased to be solvent, repeated supervisory inspections showed its financial position had progressively worsened, and all revival efforts in consultation with the Government of Maharashtra had failed. The bank had also been issued directions under Section 35A of the Banking Regulation Act, 1949 restricting its operations, and after a show-cause notice, RBI found no viable turnaround plan or prospect of meeting regulatory prescriptions. RBI requested the Registrar of Co-operative Societies, Maharashtra to order winding up and appoint a liquidator. Upon cancellation and liquidation, the bank is prohibited from carrying on banking business, including accepting and repaying deposits, and depositors may seek repayment subject to DICGC limits and terms.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location