Case Brief
The Reserve Bank of India cancelled the licence of National Co-operative Bank Ltd., Kurnool, Dist. Kurnool, Andhra Pradesh, after concluding that the bank had repeatedly failed to comply with statutory requirements and had defaulted in repayment of deposits. RBI noted chronic non-submission of statutory returns since 2005, failure to produce audited balance sheets since 2005, and inability to furnish key records for statutory inspection, including trial balance, balance sheets, profit and loss accounts, NPA registers, discharged FDRs, and loan documents. The bank's Board was found ineffective, a show-cause notice issued in September 2009 was replied to unsatisfactorily, and no viable time-bound remediation plan was offered. RBI therefore took the extreme step of cancelling the bank's licence after close of business on April 7, 2010, and requested the Registrar of Co-operative Societies, Andhra Pradesh, to initiate winding up and appoint a liquidator. Consequent to the cancellation, the bank is prohibited from carrying on banking business, including acceptance and repayment of deposits, and depositors will be covered only to the extent available under the Deposit Insurance Scheme, subject to its terms and conditions.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank