Reserve Bank of India cancels the license of Millath Co-operative Bank Limited, Davangere, Karnataka

Case Brief

The Reserve Bank of India cancelled the banking licence of Millath Co-operative Bank Ltd., Davangere, Karnataka under an order dated June 17, 2022. RBI said the bank lacked adequate capital and earning prospects and was not compliant with the relevant provisions of the Banking Regulation Act, 1949, including Section 11(1) and Section 22(3) read with Section 56. It also cited the bank's failure to meet several Section 22(3) requirements, the prejudice to depositors, the inability to pay existing depositors in full, and adverse public-interest implications. Following the cancellation, the bank is prohibited from conducting banking business, including accepting and repaying deposits, with immediate effect. The Registrar of Cooperative Societies, Karnataka has been requested to initiate winding up and appoint a liquidator.