Case Brief
The Reserve Bank of India cancelled the banking licence of Vaishali Urban Co-operative Bank Ltd., Jaipur, Rajasthan, on June 12, 2013, after determining that the bank had ceased to be solvent and that all revival efforts had failed. The RBI noted serious irregularities in loans and advances/overdrafts to directors and their relatives, apparent management involvement, failure to report fraud involving fictitious accounts and understatement of liabilities, persistent violations of the Banking Regulation Act provisions, and severe deterioration in financial health including negative CRAR, negative net worth, accumulated losses, and substantial deposit erosion. The RBI also requested the Registrar of Co-operative Societies, Rajasthan to initiate winding up and appoint a liquidator. Upon cancellation, the bank was prohibited from carrying on banking business, including acceptance and repayment of deposits, and deposit repayment would proceed subject to the Deposit Insurance and Credit Guarantee Corporation scheme.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location