Case Brief
RBI cancelled the banking licence of The Konkan Prant Sahakari Bank Ltd., Mumbai, Maharashtra, effective from the close of business on October 1, 2013. The cancellation came after the bank was found to have ceased to be solvent, with revival efforts failing, and after RBI concluded that the bank could not pay its present and future depositors. RBI cited inspection findings showing negative networth and CRAR, erosion of deposits, high NPAs, deficient credit appraisal and post-sanction supervision, non-adherence to IRAC norms, breaches of SLR and single borrower limits, and poor governance and housekeeping. The bank had earlier been placed under all-inclusive directions under section 35A, including prohibitions on fresh deposits and further lending and caps on deposit repayment; those directions had been extended from time to time. RBI also requested the Registrar of Co-operative Societies, Maharashtra, to initiate winding-up and appoint a liquidator. Once liquidation begins, insured depositor repayment under the DICGC framework will be set in motion, subject to applicable terms and conditions.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank