Case Brief
The Reserve Bank of India cancelled the licence of Bhandari Co-operative Bank Ltd., Mumbai (Maharashtra), effective as of the close of business on November 11, 2011. RBI said the bank had ceased to be solvent, revival attempts in consultation with the Maharashtra government had failed, and the bank's deteriorating condition was harming depositors. The release cites negative net worth, negative CRAR, deposit erosion, high NPAs, fraudulent auto-rickshaw and housing loans, ineffective management and board oversight, and non-compliance with statutory provisions under the Banking Regulation Act. A show-cause notice had been issued earlier, but the bank's response was not satisfactory. Following cancellation, the Registrar of Co-operative Societies was requested to initiate winding up and appoint a liquidator, and the bank was prohibited from carrying on banking business.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location