Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
23 May 2013
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.
Why RBI Acted
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.
Operating Impact
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.
Regulatory Basis
- Section 22 of the Banking Regulation Act, 1949
- Section 56 of Banking Regulation Act, 1949
- Section 5(b) of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- License cancellation
- Order Date
- 21 May 2013
- Effective From
- 21 May 2013
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank