RBI cancels licence of oldest co-op bank

Courtesy : The hindu Business Line

Mumbai, Sept. 6

The Reserve Bank of India has cancelled the licence of Anyonya Co-operative Bank Ltd, India's oldest co-operative bank.

Established in Vadodara in 1889 as Anyonya Sahayakari Mandali Co-operative Bank Ltd to provide an alternative to exploitation by moneylenders for Baroda's residents, all efforts to revive it in close consultation with the Government of Gujarat had failed and the depositors were being inconvenienced by continued uncertainty, according to the RBI.

The RBI delivered the order cancelling its licence to the bank after the close of business on September 3. The Registrar of Co-operative Societies, Gujarat, has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank, according to a RBI press release.

On liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of Rs 1 lakh from the Deposit Insurance and Credit Guarantee Corporation under usual terms and conditions. The statutory inspection of the bank with reference to its financial position as on March 31, 2005 assessed the CRAR at (-) 49.2 per cent, negative networth of (-) Rs 2,181.61 lakh, erosion in deposits to the extent of 24.2 per cent. The bank had also defaulted in maintaining of SLR.

Efforts to merge the bank with Saraswat Co-operative Bank Ltd, Mumbai, also did not fructify. The revival proposal submitted by Anyonya was not found tenable/feasible as it did not specify the amount of capital to be contributed by investors.