Mumbai, Nov 11 (UNI) The Reserve Bank of India has cancelled the licence of the Achalpur Urban Co-operative Bank Ltd, Amravati, as it had ceased to be solvent and all efforts to revive it in close consultation with the Government of Maharashtra had failed.
The Registrar of Co-operative Societies, Maharashtra, has also been requested to issue an order for winding up of the bank and appoint a Liquidator for the bank, RBI said in a release here today.
On liquidation, every depositor is entitled to repayment of his deposits up to a monetary ceiling of Rs One Lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
The bank was granted a licence by Reserve Bank on March 13, 1996. The statutory inspection of the bank conducted by RBI with reference to its financial position as on March 31, 2007 revealed that the bank was not complying with several provisions of the Banking Regulation Act 1949 (As applicable to Cooperative Societies) and had also violated several RBI guidelines / instructions. The realisable value of capital and reserves (Net Worth) of the bank had become negative. The bank was placed under directions under Section 35A of the Banking Regulation Act 1949 (As Applicable to Cooperative Societies) vide order dated March 4, 2008 precluding it from incurring any liability.
As the realisable value of bank's paid-up capital and reserves was negative and the chances of its revival were remote in the absence of a viable action plan, the Reserve Bank of India took the extreme measure of canceling licence of the bank after examining all options for its revival, in the interest of the bank's depositors.
UNI VK OBB AG1848