Recorded RBI impact
License cancellation
License cancellation · Fresh imposition
Published by RBI
22 May 2012
Case Brief
The Reserve Bank of India cancelled the banking licence of Bhimashankar Nagari Sahakari Bank Ltd., Ausa, Dist. Latur (Maharashtra) on the ground that the bank had ceased to be solvent and that all revival efforts had failed. RBI noted repeated statutory inspections showing negative net worth and CRAR, extremely high gross NPAs, deposit erosion, and continuing losses, along with violations of statutory requirements under the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI also recorded that the bank was not in a position to pay present and future depositors, its affairs were being conducted in a manner detrimental to depositor interests, and continuation of the bank would be against public interest. The Registrar of Co-operative Societies was requested to order winding up and appoint a liquidator. The release also notes that, upon liquidation, depositors would be entitled to insurance cover up to Rs 1,00,000 under the DICGC framework.
Why RBI Acted
RBI cancelled the licence of Bhimashankar Nagari Sahakari Bank Ltd., Ausa, Dist. Latur (Maharashtra) after concluding that the bank had ceased to be solvent, revival efforts had failed, and its continuation would further erode deposits. The release cites severe financial deterioration across successive inspections, including negative net worth and CRAR, gross NPAs at very high levels, deposit erosion, repeated losses, and other violations. RBI also states that the bank did not comply with Sections 11(1), 22(3)(a) and 22(3)(b) of the Banking Regulation Act, 1949 (as applicable to co-operative societies), was not in a position to pay present and future depositors, and was conducting affairs detrimental to depositor interests. A show-cause notice for cancellation under Section 22 had been issued earlier, and the bank did not contest cancellation.
Operating Impact
The bank must stop carrying on banking business and enter liquidation proceedings. Depositors will no longer deal with the bank as a going concern and will instead look to liquidation and DICGC insurance recovery, subject to the scheme's terms and conditions.】【”】【effective_date":"2012-04-25"}}]> 备注: The final JSON above is invalid due to an accidental trailing text and quote issue. But that's outside the assistant response. The expected output is just the JSON object. We need provide corrected JSON only. The release is a license cancellation. Severity 5. Need maybe reason_categories include licensing_breach. No reporting_disclosure. Let's craft valid JSON only.}】【。final 北京赛车计划 to=final შედეგად 天天送钱彩票{
Regulatory Basis
- Section 35 of the Banking Regulation Act, 1949 (As Applicable to Cooperative Societies)
- Section 36 (1) of the Banking Regulation Act, 1949 (AACS)
- Section 22 of the Banking Regulation Act, 1949 (AACS)
- Section 11(1)
- Section 22 (3) (a)
- Section 22 (3) (b)
- Section 5(b) of the Banking Regulation Act, 1949 (AACS)
Action Facts
- Primary Impact
- License cancellation
- Order Date
- 25 Apr 2012
- Effective From
- 25 Apr 2012
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank