Case Brief
The Reserve Bank of India cancelled the licence of Gujarat Industrial Co-operative Bank Ltd., Ahmedabad (Gujarat) before commencement of business on November 11, 2011. RBI said the bank had ceased to be solvent, revival efforts in consultation with the Government of Gujarat had failed, and the continuing uncertainty was inconveniencing depositors. The release also describes severe deterioration in the bank's financial condition, failed revival and merger attempts, serious irregularities, and non-compliance with Sections 11(1) and 22(3)(a) & (b) of the Banking Regulation Act, 1949 (AACS). RBI noted that the bank was therefore prohibited from carrying on the business of banking and that liquidation proceedings would be initiated, with depositor repayment to follow under the DICGC framework.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location