Case Brief
The Reserve Bank of India cancelled the banking licence of Vitthal Nagari Sahakari Bank Ltd., Latur, effective from the close of business on June 26, 2015. RBI said the bank’s financial position had deteriorated sharply, there was no viable revival or merger proposal, and the bank failed to meet statutory requirements under Sections 11(1) and 22(3)(a) of the Banking Regulation Act, 1949 (AACS). RBI also noted that the bank could not pay depositors in full, its affairs were detrimental to depositor interests, and allowing it to continue would adversely affect public interest. Following the cancellation, the bank was prohibited from conducting banking business, and the Registrar of Co-operative Societies, Maharashtra was asked to initiate winding up and appoint a liquidator. Deposit insurance proceedings under DICGC were to begin, subject to the usual repayment ceiling.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Co-operative bank
- Location