Case Brief
RBI cancelled the banking licence of Shri Laxmi Sahakari Bank Ltd., Sangamnagar (Khed), Satara after concluding that the bank had ceased to be solvent and that efforts to revive it had failed. The bank had earlier been placed under Section 35A directions restricting its operations from June 24, 2009, following a statutory inspection that showed its financial position was impaired. RBI had also issued a show-cause notice on September 2, 2009. After reviewing the response and finding no viable turnaround plan or realistic prospect of revival, RBI took the extreme step of cancelling the licence after close of business on January 5, 2010. The Registrar of Co-operative Societies, Maharashtra was requested to initiate winding-up and appoint a liquidator, and the release notes that depositors would be entitled to DICGC protection up to Rs.1,00,000 under the usual scheme conditions.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location