Case Brief
What Happened
The Reserve Bank of India cancelled the licence of The Cambay Hindu Merchants Co-operative Bank Ltd., Khambhat (Gujarat) after determining that the bank had become insolvent, was facing acute liquidity stress, and had a precarious financial position. RBI had earlier placed the bank under directions effective September 7, 2009, but subsequent revival efforts in consultation with the Government of Gujarat failed. After reviewing the bank’s reply to a show-cause notice and finding no viable turnaround plan, RBI took the extreme measure of cancelling the licence in the interest of depositors and requested the Registrar of Co-operative Societies, Gujarat to initiate winding-up and appoint a liquidator.