Case Brief
What Happened
RBI cancelled the banking licence of The Urban Co-operative Bank Ltd., Bhubaneswar, Odisha, which had been granted on September 7, 1987 under Section 22 of the Banking Regulation Act, 1949. The regulator said the bank had ceased to be solvent, revival efforts had failed, and the institution could no longer be allowed to continue banking operations. RBI cited deteriorating financial health, including negative assessed net worth, negative CRAR, and high gross and net NPAs, along with loans sanctioned to directors and relatives that mostly turned NPA. It also recorded repeated show-cause notices for licence cancellation, failure to submit a satisfactory revival response, inability to produce a viable merger proposal, and continued violations of Sections 11(1), 18, and 22(3)(a) and 22(3)(b). On this basis, RBI cancelled the licence and stated that the bank was prohibited from carrying on banking business, including accepting and repaying deposits. The Registrar of Co-operative Societies, Government of Odisha was requested to initiate winding up and appoint a liquidator.