Reserve Bank Cancels the Licence of Rajeshwar Yuvak Vikas Sahakari Bank Ltd.,Satara, (Maharashtra)

Case Brief

The Reserve Bank of India cancelled the licence of Rajeshwar Yuvak Vikas Sahakari Bank Ltd., Satara, Maharashtra, effective after the close of business on April 8, 2010. RBI said the bank had ceased to be solvent, revival efforts with the Government of Maharashtra had failed, and the bank lacked a viable plan to turn around. A statutory inspection as of March 31, 2009 showed the bank’s financial position was impaired, and Section 35A directions restricting its operations had already been issued from November 16, 2009. After issuing and examining a show-cause notice, RBI concluded that the possibility of revival was remote and cancelled the licence in the interest of depositors. The Registrar of Co-operative Societies, Maharashtra was asked 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’ claims will move through liquidation subject to DICGC terms.