RBI cancels the Licence of the Shri Sai Urban Co-operative Bank Ltd., Mukhed, Dist. Nanded, Maharashtra

Case Brief

The Reserve Bank of India cancelled the licence of Shri Sai Urban Co-operative Bank Ltd., Mukhed, Dist. Nanded, Maharashtra, effective from the close of business on December 28, 2016. RBI said the bank had not complied with minimum capital and reserves requirements under Section 11(1) of the Banking Regulation Act, 1949 (AACS), was operating in a manner detrimental to the interests of present and future depositors and the public, and was in violation of Sections 11 and 22(3) of the Act. RBI further stated that the bank was not in a position to pay its depositors in full and that its financial position left no scope for revival. As a consequence, the bank was prohibited from conducting banking business and liquidation proceedings, including depositor payment under the DICGC framework, were to begin.