Case Brief
The Reserve Bank of India cancelled the licence of Swami Samarth Sahakari Bank Ltd., Akkalkot, Solapur, Maharashtra, effective from the close of business on December 28, 2012. RBI said the bank had ceased to be solvent, revival efforts had failed, and continued uncertainty was inconveniencing depositors. The release details repeated deterioration in the bank’s financial position, including negative net worth and CRAR, high NPAs, erosion of deposits, accumulated losses, and defaults in CRR and SLR maintenance. RBI also recorded serious irregularities and violations, including non-compliance with several provisions of the Banking Regulation Act, 1949 as applicable to co-operative societies. Before cancellation, the bank had already been placed under all-inclusive directions under section 35A and issued a show-cause notice. RBI stated that, with cancellation and liquidation, the process of paying insured deposits under the DICGC scheme would begin, and the bank would be prohibited from carrying on banking business.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location