RBI cancels Baroda Mercantile Co-operative Bank's licence

Mumbai, May 17 (UNI) The Reserve Bank of India (RBI) today cancelled the licence of The Baroda Mercantile Co-operative Bank Limited, Vadodara, an RBI release issued here stated.

This follows the Gujarat-based bank ceasing to be solvent and all efforts to revive it in close consultation with the Government of Gujarat having failed.

With a view to protecting the depositors from being inconvenienced by continued uncertainty regarding the bank, the apex bank delivered the order cancelling its licence granted to the bank yesterday at 14:40 hrs.

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

The release also highlighted the fact that on liquidation every depositor is entitled to repayment of his deposits up to a monetary ceiling of Rs 100,000 from the Deposit Insurance and Credit Guarantee Corporation (DICGC), under the usual terms and conditions.

With the cancellation of the bank's licence and commencement of liquidation proceedings, the process of paying the depositors will be set in motion subject to the terms and conditions of the Deposit Insurance Scheme.

''Consequent to the cancellation of its licence, the Baroda Mercantile Co-operative Bank is 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,'' stated the RBI release.

UNI JJ MAZ SKB1803