Reserve Bank Cancels the Licence of The Ahmedabad Peoples’ Co-operative Bank Ltd., Ahmedabad (Gujarat)

Case Brief

The Reserve Bank of India cancelled the licence of The Ahmedabad Peoples’ Co-operative Bank Ltd., Ahmedabad (Gujarat), Ahmedabad, with effect after the close of business on January 08, 2010. RBI said the bank had ceased to be solvent, revival efforts in consultation with the Government of Gujarat had failed, and the situation was causing continued inconvenience and uncertainty for depositors. The release further notes that a snap scrutiny in May 2007 had revealed violations of RBI directives/instructions/guidelines on conduct of insurance business and exposure ceiling, and that statutory inspections as of March 31, 2008 and March 31, 2009 showed the financial position had deteriorated and become precarious. The bank had already been placed under directions on May 13, 2009, and after a show-cause notice dated October 06, 2009, RBI found no viable plan for revival. RBI therefore cancelled the licence and requested the Registrar of Co-operative Societies, Gujarat to order winding up and appoint a liquidator.