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Ghaziabad Urban Co-operative Bank Ltd., Ghaziabad (UP)

Co-operative bankGhaziabad, Uttar 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

19 Nov 2012

Case Brief

The Reserve Bank of India cancelled the licence of Ghaziabad Urban Co-operative Bank Ltd., Ghaziabad (UP) under section 22 of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI said the bank had become insolvent, revival efforts had failed, and continued operation would inconvenience and harm depositors. The release describes multiple statutory inspections showing severe net-worth erosion and deposit erosion, continued non-compliance with sections 11(1), 18, 24 and 22(3)(a), violation of section 22(3)(b), and repeated defaults in SLR and CRR maintenance. RBI also noted that the advances portfolio had almost fully turned NPA and that the bank had earlier been placed under section 35A directions restricting fresh deposits and allowing limited withdrawals. Following cancellation, the RBI requested the Uttar Pradesh Registrar of Co-operative Societies to order winding up and appoint a liquidator.

Why RBI Acted

Capital & exposure normsGovernance oversightOther

RBI cancelled the banking licence granted under section 22 of the Banking Regulation Act, 1949 (as applicable to co-operative societies) after statutory inspections showed continued and worsening financial distress. The release cites net-worth erosion, deposit erosion, repeated violations of sections 11(1), 18 and 24, inability to comply with section 22(3)(a), and conduct detrimental to present and future depositors under section 22(3)(b). It also notes that revival efforts had failed, advances were almost fully NPA, and the bank had defaulted on SLR and CRR maintenance on many occasions. RBI further requested the Registrar of Co-operative Societies to initiate winding up and appoint a liquidator.

Operating Impact

The bank must cease banking business, including accepting and repaying deposits, and liquidation proceedings are to begin. Depositors' claims will be addressed through the liquidation process, subject to deposit insurance terms and the applicable ceiling of Rs 1,00,000 per depositor.

Regulatory Basis

  • Section 22 of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies)
  • section 35 of the Act
  • section 11(1)
  • 22(3)(a)
  • section 35A of the Act
  • sections 11(1) and 22(3)(a) of the Act
  • section 5ccv (3) of the Act
  • sections 18 and 24 of the Act
  • section 22(3)(b) of the Act
  • Section 5(b) of the Banking Regulation Act, 1949 (AACS)

Action Facts

Primary Impact
License cancellation
Order Date
16 Nov 2012
Effective From
16 Nov 2012
Entities Affected
1
Entity Role
Primary
Entity Type
Co-operative bank