Case Brief
What Happened
RBI cancelled the banking licence of Arjun Urban Co-operative Bank Ltd., Solapur, Maharashtra, effective from the close of business on May 21, 2013. The order was issued because the bank had ceased to be solvent, revival efforts had failed, and the bank’s condition had deteriorated sharply over successive inspections. The release cites substantial losses, very high NPAs, negative net worth and CRAR, erosion in deposits, repeated defaults in SLR and CRR maintenance, preferential payment of deposits to a credit society, and violations of several provisions of the Banking Regulation Act. RBI also noted that the bank’s response to the show-cause notice was unsatisfactory. The Registrar of Co-operative Societies was asked to initiate winding up and appoint a liquidator, and depositors were informed that insured claims would be processed under the DICGC framework.