Case Brief
The Reserve Bank of India cancelled the banking licence of Annasaheb Patil Urban Co-operative Bank Ltd., Aurangabad (Maharashtra), effective before commencement of business on March 9, 2010, after concluding that the bank had ceased to be solvent and that efforts to revive it had failed. RBI noted that the bank’s financial condition had been adverse for several years, that the realizable value of paid-up capital and reserves was negative, and that the chances of revival were remote. The bank’s statutory inspection also revealed non-compliance with several provisions of the Banking Regulation Act, 1949 (as applicable to co-operative societies) and violations of RBI guidelines/instructions. RBI had earlier issued a show-cause notice under Section 22 of the Banking Regulation Act, 1949, but found the reply unacceptable. Consequent to the cancellation, the Registrar of Co-operative Societies, Maharashtra was requested to order winding up and appoint a liquidator, and depositors would be entitled to insurance coverage up to Rs. 1 lakh under DICGC, subject to applicable terms and conditions.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank