The Reserve Bank of India (RBI) has cancelled the licence of Pune-based Siddharth Sahakari Bank Ltd as it had ceased to be solvent and all efforts to revive it had failed. The apex bank had also requested the registrar of co-operative societies, Maharashtra to issue an order for winding up the bank and appoint a liquidator for the bank.
In a statement issued on
Thursday, the apex bank noted, "In view of the fact that Siddharth Sahakari Bank Ltd, Pune, Maharashtra had ceased to be solvent, all efforts to revive it in close consultation with the government of Maharashtra had failed and the depositors were being inconvenienced by continued uncertainty, the RBI delivered the order cancelling its licence to the bank before commencement of business on June 14, 2011."
On liquidation of the bank, every depositor would be entitled to a repayment of his/her deposits up to a monetary ceiling of Rs one lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC) under usual terms and conditions. A scrutiny conducted with reference to the bank’s financial position as on September 30, 2010 had revealed further deterioration in its financial parameters. The CRAR was negative (-)90.3 per cent, net worth was assessed at (-) Rs 1,463.41 lakh and net loss was assessed at Rs 1,723.70 lakh as on that date.
Additionally, the bank had apprised that it was facing severe liquidity problems due to heavy withdrawals from deposit accounts during September 2010. The sponsorship of sub-membership of the bank to Pune Bankers’ Clearing House was withdrawn by Cosmos Co-operative Bank Ltd, Pune with effect from October 30, 2010 as the bank had failed to meet its clearing liability.
"Serious deficiencies as mentioned above revealed that the affairs of the bank were being conducted in a manner detrimental to the interests of the depositors," the statement further noted.
The bank was issued a show cause notice on April 06, 2011 as to why the licence granted to the bank on November 29, 1996 to conduct banking business should not be cancelled. The bank had submitted its reply but was not found satisfactory.
The bank was also advised to explore the possibility of merger with a sound urban cooperative bank. But in absence of any concrete proposal for merger, the RBI took the extreme measure of cancelling licence of the bank in the interest of bank's depositors.
With the cancellation of licence and commencement of liquidation proceedings, the process of paying the depositors of the Siddharth Sahakari Bank Ltd, Pune, Maharashtra will be set in motion subject to the terms and conditions of the Deposit Insurance Scheme, the apex bank said.
Siddharth Sahakari Bank was granted a licence by RBI on November 29, 1996 to commence banking business.
Source / Courtesy : The Business Standard
In a statement issued on
Thursday, the apex bank noted, "In view of the fact that Siddharth Sahakari Bank Ltd, Pune, Maharashtra had ceased to be solvent, all efforts to revive it in close consultation with the government of Maharashtra had failed and the depositors were being inconvenienced by continued uncertainty, the RBI delivered the order cancelling its licence to the bank before commencement of business on June 14, 2011."
On liquidation of the bank, every depositor would be entitled to a repayment of his/her deposits up to a monetary ceiling of Rs one lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC) under usual terms and conditions. A scrutiny conducted with reference to the bank’s financial position as on September 30, 2010 had revealed further deterioration in its financial parameters. The CRAR was negative (-)90.3 per cent, net worth was assessed at (-) Rs 1,463.41 lakh and net loss was assessed at Rs 1,723.70 lakh as on that date.
Additionally, the bank had apprised that it was facing severe liquidity problems due to heavy withdrawals from deposit accounts during September 2010. The sponsorship of sub-membership of the bank to Pune Bankers’ Clearing House was withdrawn by Cosmos Co-operative Bank Ltd, Pune with effect from October 30, 2010 as the bank had failed to meet its clearing liability.
"Serious deficiencies as mentioned above revealed that the affairs of the bank were being conducted in a manner detrimental to the interests of the depositors," the statement further noted.
The bank was issued a show cause notice on April 06, 2011 as to why the licence granted to the bank on November 29, 1996 to conduct banking business should not be cancelled. The bank had submitted its reply but was not found satisfactory.
The bank was also advised to explore the possibility of merger with a sound urban cooperative bank. But in absence of any concrete proposal for merger, the RBI took the extreme measure of cancelling licence of the bank in the interest of bank's depositors.
With the cancellation of licence and commencement of liquidation proceedings, the process of paying the depositors of the Siddharth Sahakari Bank Ltd, Pune, Maharashtra will be set in motion subject to the terms and conditions of the Deposit Insurance Scheme, the apex bank said.
Siddharth Sahakari Bank was granted a licence by RBI on November 29, 1996 to commence banking business.
Source / Courtesy : The Business Standard
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