Mumbai, Aug 29 (UNI) The Reserve Bank of India has cancelled the licence of the Miraj Urban Co-operative Bank Limited in Miraj in Maharashtra, as the bank had failed in all its efforts of revival.
RBI, in a release here, said that the licence had been closed after closure of the business on August 26. The Registrar of Co-operative Societies, Maharashtra, has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank.
On liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of Rs 1,00,000 only (Rupees One lakh only) from the Deposit Insurance and Credit Guarantee Corporation (DICGC) under usual terms and conditions.
The bank was granted a licence by Reserve Bank on March 19, 1986 to commence banking business. The statutory inspection of the bank with respect to its position as on March 31, 2006 had indicated that its financial position was impaired. The bank was issued directions under Section 35 A of the Banking Regulation Act, 1949 on October 27, 2006 restricting its operations, including placing a ceiling on withdrawal of deposits at Rs. 1000.
On the basis of findings of a quick scrutiny of the account banks of the bank conducted in March 2007, Reserve Bank issued a requisition dated July 25, 2007 to the Registrar of Co-operative Societies, Maharashtra State under section 110 A of Maharashtra Co-operative Societies Act, 1960 and the Board of Directors of the bank was superceded by RCS.
The bank was served a notice on August 2, 2007, calling on it to show cause as to why the licence granted to it under Section 22 of the Act on March 19, 1986 to carry on banking business, should not be cancelled and why steps should not be taken to wind up the bank. The bank sought some time to improve its position and to explore the possibility of merger with any other strong Urban Co-operative Bank.
The inspection of the bank with reference to its financial position as on March 31, 2008 revealed further deterioration in its financial position. With deposit erosion at 49.8 per cent and the absence of any concrete proposal for merger, the possibility of revival of the bank was remote. Therefore, the Reserve Bank of India took the extreme measure of cancelling licence of the bank in the interest of the bank's depositors. With the cancellation of its licence and commencement of liquidation proceedings, the process of paying the depositors of Miraj Urban Co-operative Bank Limited, Miraj, Maharashtra, will be set in motion subject to the terms and conditions of the Deposit Insurance Scheme.
UNI VK SR NP1931