Case Brief
The Reserve Bank of India cancelled the licence of Vishwakarma Nagari Sahakari Bank Maryadit, Aurangabad (Maharashtra), effective from the close of business on September 12, 2013. RBI said the bank had ceased to be solvent and that continuing it would be against public interest. The release cites a long history of adverse inspection findings, including repeated defaults in maintaining CRR and SLR, violations of KYC/AML guidelines, unsecured advances beyond prescribed limits, poor management quality, deterioration in capital adequacy and net worth, high NPAs, incorrect DTL computation, borrowings against FDRs, and breaches of Section 35A operational instructions such as paying excess amounts to certain depositors and splitting deposit accounts. RBI also requested the Registrar of Co-operative Societies, Maharashtra State to order winding up and appoint a liquidator. Consequent to the cancellation, the bank is prohibited from carrying on banking business, and deposit insurance payout process would begin subject to DICGC terms and conditions.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location