Case Brief
The Reserve Bank of India cancelled the licence of Surendranagar Peoples Co-operative Bank Ltd., Surendranagar, Gujarat after business on September 4, 2009. RBI said the bank had ceased to be solvent, its affairs were being conducted detrimentally to the interests of depositors, and depositors were facing continued uncertainty. Earlier statutory inspections indicated impaired financial position and violations of RBI directives and guidelines, while subsequent inspections in 2006, 2007 and 2008 showed further deterioration. A show-cause notice dated January 1, 2009 was issued, but the reply was not satisfactory. RBI also requested the Registrar of Co-operative Societies, Gujarat to initiate winding up and appoint a liquidator. Following cancellation, the bank was prohibited from carrying on banking business, including acceptance and repayment of deposits; depositors would be dealt with under the Deposit Insurance and Credit Guarantee Corporation scheme up to Rs. 1,00,000 per depositor.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location