Reserve Bank Cancels the Licence of Arjun Urban Co-Operative Bank Ltd., Dist. Solapur, Maharashtra for carrying on banking business
Case Brief
The Reserve Bank of India cancelled the licence of Arjun Urban Co-Operative Bank Ltd., Dist. Solapur, Maharashtra, by order dated May 21, 2013. The cancellation was made under Section 22 of the Banking Regulation Act, 1949 (as applicable to co-operative societies) read with Section 56. Following the order, the bank is barred from transacting banking business, including acceptance and repayment of deposits.
The Reserve Bank of India cancelled, by order dated May 21, 2013, the licence of Arjun Urban Co-Operative Bank Ltd., Dist. Solapur, Maharashtra, to carry on banking business under Section 22 of the Banking Regulation Act, 1949 (as applicable to co-operative societies) read with Section 56 of the Act. As a result, the bank is precluded from transacting the business of banking as defined in Section 5(b) of the Act, including acceptance and repayment of deposits, forthwith.
Severity Assessment
Licence cancellation is a severity 5 action because it removes the institution’s ability to operate as a bank at all.
The bank must stop carrying on banking business immediately, and customers/depositors can no longer use it for deposit acceptance or repayment activities. The cancellation has an immediate operational impact and effectively prevents the bank from functioning as a banking institution.
Published as Arjun Urban Co-Operative Bank Ltd.
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