Cancellation of licence to carry on banking business in India and Voluntary Conversion of Urban Co-operative Bank into a Co-operative Society under Sections 22 and 36A(2) of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies) – Sher Nagrik Sahakari Bank Ltd., Jabalpur (Madhya Pradesh)

Case Brief

The Reserve Bank of India notified that Sher Nagrik Sahakari Bank Ltd., Jabalpur (Madhya Pradesh) had sought voluntary conversion into a co-operative credit society and declaration as a non-banking institution. After noting compliance with Section 36A(2) requirements of the Banking Regulation Act, 1949 (as applicable to co-operative societies), RBI cancelled the bank’s licence by order dated February 8, 2018. As a result, the entity ceased to be a co-operative bank and the provisions of the Act applicable to such banks no longer applied. RBI also prohibited it from carrying on banking business in India under Section 22 read with Section 56, including accepting or repaying public deposits.