In yet another case of urban cooperative bank going bust RBI has
cancelled the licence of Bharat Urban Co-operative Bank based in Solapur
of Maharashtra. In a communique RBI said that all efforts to revive it
in close consultation with the Government of Maharashtra had failed and
the depositors were being inconvenienced by continued uncertainty.
Reserve Bank of India delivered the order cancelling its licence to the bank as on the close of business on November 25, 2011.
The Registrar of Co-operative Societies, Maharashtra has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank. It may be highlighted that on liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of Rupees One lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC) under
usual terms and conditions.
The bank was granted a licence by RBI on February 5, 1998 to commence banking business. The statutory inspection in March 2006 of the bank revealed deterioration in its financial indicators such as CRAR was at 7.5% as against the regulatory requirement of 9.0% and gross and net NPAs were assessed at 39.9% and 34.3% of the gross and net advances, respectively.
The financial parameters of the bank continued to deteriorate further as revealed during subsequent inspections conducted with reference to its financial position as on March 31, 2007, March 31, 2008, March 31, 2009, March 2010 and a scrutiny based on the financial position as on September 30, 2010.
The Board of directors of the bank was found to be ineffective and responsible for deterioration in the financial position of the bank & for conducting the affairs of the bank in a manner detrimental to the interest of the depositors. Accordingly, a requisition dated May 23, 2011 was made to Registrar of Co-operative Societies, Maharashtra for supersession of the Board of Directors of the bank. Registrar on May 25, 2011 superseded the Board of the bank and appointed Board of Administrators.
Therefore, 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 Bharat Urban Co-operative Bank Ltd., Solapur (Maharashtra) the amount insured as per the DICGC Act, will be set in motion subject to the terms and conditions of the Deposit Insurance Scheme.
Courtesy : www..indiancooperative.com
Reserve Bank of India delivered the order cancelling its licence to the bank as on the close of business on November 25, 2011.
The Registrar of Co-operative Societies, Maharashtra has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank. It may be highlighted that on liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of Rupees One lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC) under
usual terms and conditions.
The bank was granted a licence by RBI on February 5, 1998 to commence banking business. The statutory inspection in March 2006 of the bank revealed deterioration in its financial indicators such as CRAR was at 7.5% as against the regulatory requirement of 9.0% and gross and net NPAs were assessed at 39.9% and 34.3% of the gross and net advances, respectively.
The financial parameters of the bank continued to deteriorate further as revealed during subsequent inspections conducted with reference to its financial position as on March 31, 2007, March 31, 2008, March 31, 2009, March 2010 and a scrutiny based on the financial position as on September 30, 2010.
The Board of directors of the bank was found to be ineffective and responsible for deterioration in the financial position of the bank & for conducting the affairs of the bank in a manner detrimental to the interest of the depositors. Accordingly, a requisition dated May 23, 2011 was made to Registrar of Co-operative Societies, Maharashtra for supersession of the Board of Directors of the bank. Registrar on May 25, 2011 superseded the Board of the bank and appointed Board of Administrators.
Therefore, 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 Bharat Urban Co-operative Bank Ltd., Solapur (Maharashtra) the amount insured as per the DICGC Act, will be set in motion subject to the terms and conditions of the Deposit Insurance Scheme.
Courtesy : www..indiancooperative.com
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