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Deendayal Nagrik Sahakari Bank Maryadit, Khandwa, (M.P)

Co-operative bankKhandwa, Madhya Pradesh

The RBI action, regulatory basis, and operating impact linked to this entity.

Recorded RBI impact

License cancellation

License cancellation · Fresh imposition

S5

Published by RBI

9 Mar 2009

Case Brief

The Reserve Bank of India cancelled the licence of Deendayal Nagrik Sahakari Bank Maryadit, Khandwa, Madhya Pradesh, after finding that the bank had ceased to be solvent and that repeated revival efforts had failed. RBI said statutory inspections had revealed deterioration in the bank’s financial position and later serious deficiencies/irregularities, and the bank had no viable revival plan. The bank had earlier been placed under Section 35A directions, but RBI ultimately took the extreme step of cancelling the licence in the interest of depositors. The Registrar of Co-operative Societies, Madhya Pradesh has been asked to initiate winding-up and appoint a liquidator.

Why RBI Acted

Capital & exposure normsGovernance oversightOther

RBI cancelled the licence of Deendayal Nagrik Sahakari Bank Maryadit, Khandwa, after statutory inspection found deterioration in its financial position and later serious deficiencies/irregularities. The bank had ceased to be solvent, efforts to revive it in consultation with the Government of Madhya Pradesh failed, depositor uncertainty continued, and the bank had no viable plan of action for revival. RBI had earlier issued show-cause notice and placed the bank under Section 35A directions before taking the extreme step of licence cancellation. The Registrar of Co-operative Societies, Madhya Pradesh was requested to initiate winding-up and appoint a liquidator.

Operating Impact

The bank can no longer carry on banking business, including accepting or repaying deposits. Liquidation proceedings will commence, and depositors will seek insurance-backed repayment up to the DICGC ceiling of Rs. 1,00,000 per depositor, subject to applicable rules and process.

Regulatory Basis

  • Section 35 of the Banking Regulation Act, 1949
  • Section 35A of the Banking Regulation Act, 1949 (AACS)
  • Section 5(b) of the Banking Regulation Act, 1949 (AACS)

Action Facts

Primary Impact
License cancellation
Order Date
4 Mar 2009
Effective From
4 Mar 2009
Entities Affected
1
Entity Role
Primary
Entity Type
Co-operative bank