Case Brief
The Reserve Bank of India cancelled the banking licence of Dhanashri Mahila Sahakari Bank Ltd., Miraj, Dist. Sangli, Maharashtra after determining that the bank had ceased to be solvent and that its financial condition had deteriorated sharply. RBI stated that attempts to revive the bank in consultation with the Government of Maharashtra had failed, the bank had no concrete revival or merger plan, and its reply to the statutory show-cause notice was unsatisfactory. The cancellation followed earlier all-inclusive directions under Section 35A of the Banking Regulation Act, 1949 (as applicable to co-operative societies), which had capped withdrawals at Rs. 1,000. RBI requested the Registrar of Co-operative Societies, Maharashtra to initiate winding up and appoint a liquidator. Following cancellation, the bank is prohibited from carrying on banking business, including accepting and repaying deposits, and depositors’ claims will be processed subject to the Deposit Insurance Scheme and DICGC limits.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location