RBI cancels licence of Karnataka-based co-op bank

Mumbai, May 16 (UNI) The Reserve Bank of India (RBI) has cancelled the licence granted to The Onake Obavva Mahila Co-operative Bank Limited, Chitradurga, Karnataka, with effect from after close of business hours on May 12, 2006.

The action follows the bank becoming insolvent and all efforts to revive it in close consultation with the Government of Karnataka meeting with failure, stated a RBI press release issued today.

The apex bank has requested the Registrar of Co-operative Societies, Karnataka, to issue an order for winding up of the bank and appointing a liquidator for it.

On liquidation, every depositor is entitled to repayment of his deposits up to a monetary ceiling of Rs 1,00,000 from the Deposit Insurance and Credit Guarantee Corporation (DICGC), the release pointed out, adding that the process of paying the depositors of the bank as per the DICGC Act will be set in motion.

''Consequent to the cancellation of its licence, the The Onake Obavva Mahila Co-op Bank Ltd. is prohibited from carrying on ''banking business'' as defined in Section 5 (b) of the Banking Regulation Act, 1949 (AACS), including aceptance and repayment of deposits,'' stated the release.

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