Case Brief
The Reserve Bank of India cancelled the banking licence of Bhimashankar Nagari Sahakari Bank Ltd., Ausa, Dist. Latur (Maharashtra) on the ground that the bank had ceased to be solvent and that all revival efforts had failed. RBI noted repeated statutory inspections showing negative net worth and CRAR, extremely high gross NPAs, deposit erosion, and continuing losses, along with violations of statutory requirements under the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI also recorded that the bank was not in a position to pay present and future depositors, its affairs were being conducted in a manner detrimental to depositor interests, and continuation of the bank would be against public interest. The Registrar of Co-operative Societies was requested to order winding up and appoint a liquidator. The release also notes that, upon liquidation, depositors would be entitled to insurance cover up to Rs 1,00,000 under the DICGC framework.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location