Case Brief
The Reserve Bank of India cancelled the licence of Shri Balaji Co-operative Bank Ltd., Nashik, Maharashtra, stating that the bank had ceased to be solvent, revival efforts had failed, and depositors were facing continued uncertainty. RBI noted serious deterioration in the bank’s financial condition, including negative CRAR, negative net worth, heavy erosion of deposits, very high NPAs, and defaults in maintaining CRR and SLR. The bank was also found non-compliant with several provisions of the Banking Regulation Act, 1949 (as applicable to co-operative societies), and had not taken adequate steps to recover NPAs or submit a satisfactory merger proposal. RBI had earlier placed the bank under Section 35A directions and issued a show-cause notice, but found the reply unsatisfactory and proceeded with licence cancellation. The Registrar of Co-operative Societies, Maharashtra was requested to initiate winding up and appoint a liquidator. Consequent to cancellation, the bank cannot conduct banking business, including acceptance and repayment of deposits, and depositors’ claims will be addressed through liquidation and the DICGC framework, subject to applicable terms and limits.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank