Case Brief
The Reserve Bank of India cancelled the licence of Vizianagaram Co-operative Urban Bank Ltd., Vizianagaram, Andhra Pradesh, after concluding that the bank’s operations were detrimental to depositors and the public, its financial position had declined without foreseeable revival, and compliance efforts had failed. Inspections showed deterioration in key financial parameters, inadequate assets to meet liabilities, and non-compliance with minimum capital and reserve requirements. RBI had earlier issued operational instructions restricting premature withdrawal of deposits and acceptance of fresh deposits, and later issued a show-cause notice that did not elicit a satisfactory reply or viable turnaround plan. The cancellation was ordered in the interest of depositors, and liquidation proceedings were to be initiated.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location