Case Brief
RBI cancelled the licence of Baranagar Co-operative Bank Ltd., Kolkata (West Bengal), effective from the close of business on January 21, 2015. The Registrar of Co-operative Societies, West Bengal was asked to initiate winding-up proceedings and appoint a liquidator. RBI said the bank had become insolvent, could not meet its liabilities to depositors, and had no realistic prospect of revival, with its operations being carried out in a manner detrimental to depositors and the public in violation of Sections 11 and 22(3) of the BR Act. The bank had also been under all-inclusive directions under Section 35A since July 30, 2013, which were extended thrice, before RBI issued a show-cause notice on August 20, 2014 and ultimately decided to cancel the licence. As a result, the bank is prohibited from carrying on banking business, including acceptance and repayment of deposits, and liquidation/deposit insurance processes under the DICGC Act will commence.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location