Mumbai, Feb 26 (UNI) The Reserve Bank of India (RBI) today notified cancellation of the license accorded to the Bharuch Nagarik Sahakari Bank in Gujarat as the Bank had ceased to be solvent and all efforts to revive it in close consultation with the Gujarat Government had failed and the depositors were being inconvenienced by continued uncertainty.
The Bank in a notification here said that the license to the bank had been cancelled on February 22 and the Registrar of Co-operative Societies, Gujarat had also been requested to issue an order for winding up the bank and appoint a liquidator for the bank.
It may be highlighted that on liquidation every depositor was entitled to repay his deposits up to a monetary ceiling of Rs 1,00,000 from the Deposit Insurance and Credit Guarantee Corporation (DICGC) under usual terms and conditions.
The notification said that the RBI decided to cancel the license of the Bharuch Nagarik Sahakari Bank as a final step after examining all the options for revival of the bank and in order to protect the interest of the depositors.
The inspection of the bank conducted with reference to its position as on March 31, 2006 revealed deterioration in its financial condition. Its deposits were getting eroded as realisable value of paid-up capital and reserve was in the negative. In view of the deterioration in the bank's financial position and liquidity crunch, the bank was issued directions under Section 35 (a) of the Act with effect from close of business on July 12, 2006 prohibiting it, inter alia, from accepting fresh deposits and granting fresh loans and restricting repayment of deposits to Rs 1,000 per deposit account.
Subsequent inspection of the bank conducted with reference to its position as on March 31, 2007 revealed further deterioration in the quality of assets.
The Apex Bank had issued a notice to the bank on October 16, 2007 asking it to show cause as to why the license granted to it to conduct banking business should not be cancelled. The bank could not come up with a viable plan of action for its revival and the chances of its revival were remote hence the license had been cancelled.
Consequent to the cancellation of its license, the Bharuch Nagarik Sahakari Bank had been prohibited from carrying on 'banking business' as defined in Section 5 (b) of the Banking Regulation Act, 1949 (AACS) including acceptance and repayment of deposits.
Depositors may approach Reserve Bank of India Urban Banks Department Assistant General Manager Mythili Ramakrishnan in Ahmedabad.
UNI VK NM AG1407