Case Brief
The Reserve Bank of India cancelled the banking licence of Subhadra Local Area Bank Ltd., Kolhapur, Maharashtra, by order dated December 24, 2020 under Section 22(4) of the Banking Regulation Act, 1949. RBI said the bank’s affairs were detrimental to the interests of its present and future depositors, public interest would be adversely affected by allowing it to continue in its existing manner, and the general character of management was prejudicial to depositor interests; it also noted that the bank breached the minimum net worth requirement for two quarters in FY 2019-20. The cancellation is effective from close of business on December 24, 2020, and the bank is prohibited from conducting banking business or any additional business under the Act, after which RBI said it would apply for winding up before the High Court.
Action Snapshot
- Primary Impact
- License cancellation
- Entity Type
- Bank
- Location