Case Brief
The Reserve Bank of India cancelled the licence of The Baripada Urban Co-operative Bank Ltd., Baripada (Odisha), effective October 16, 2014, after concluding that the bank had ceased to be solvent, revival attempts had failed, and continuing uncertainty was harming depositors. The release describes major adverse findings from statutory inspections, including negative capital and CRAR, negative net worth, substantial accumulated losses, high gross and net NPAs, erosion in deposits, and weak recovery prospects. RBI also noted irregularities such as overstating profits by using unrealized interest on NPAs, failure to report CTR/STR transactions to FIU-IND, and non-compliance with several provisions of the Banking Regulation Act. The bank had earlier been placed under All-Inclusive Directions under Section 35A, which were extended until November 18, 2014, but the situation continued to deteriorate. RBI consequently cancelled the licence, asked the Registrar of Co-operative Societies, Odisha to initiate winding up and appoint a liquidator, and stated that the bank is prohibited from carrying on banking business.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank