Case Brief
The Reserve Bank of India cancelled the banking licence of Rajlaxmi Nagari Sahakari Bank Ltd., Dhule, District Dhule, Maharashtra, with effect after the close of business on October 27, 2009. RBI said the bank had ceased to be solvent, efforts to revive it in consultation with the Government of Maharashtra had failed, and the depositors were being inconvenienced by continued uncertainty. A statutory inspection as of March 31, 2009 had revealed that the bank’s position was precarious. RBI had also earlier issued Section 35A directions restricting the bank’s operations and had issued a show-cause notice on May 12, 2009 asking why the licence should not be cancelled. After examining the reply and finding no viable turnaround plan or prospect of meeting regulatory prescriptions, RBI took the extreme measure of cancelling the licence and requested the Registrar of Co-operative Societies, Maharashtra to order winding up and appoint a liquidator.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location