Case Brief
RBI cancelled the banking licence of The Mirzapur Urban Co-operative Bank Ltd., Mirzapur (Uttar Pradesh), with effect from the close of business on September 11, 2014. The regulator said the bank had ceased to be solvent, revival prospects were bleak, all efforts to revive it had failed, and there was no viable merger proposal. The release cites serious deficiencies from statutory inspections, including erosion of capital and reserves, negative CRAR, large NPAs, accumulated losses, and violations of regulatory norms such as limits on single-borrower exposures, unsecured advances, IRAC norms and KYC norms. RBI also stated the bank had not complied with several provisions of the Banking Regulation Act and had been conducting its affairs in a manner detrimental to depositors’ interests. Following cancellation, the bank is prohibited from carrying on banking business and liquidation proceedings are to begin, with DICGC-insured deposit repayment to be set in motion subject to applicable terms and conditions.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location