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Jamkhed Merchants Co-operative Bank Maryadit

Co-operative bankJamkhed, Maharashtra

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

1 Jun 2017

Case Brief

RBI cancelled the licence of Jamkhed Merchants Co-operative Bank Maryadit, Jamkhed, Dist. Ahmednagar, Maharashtra, effective from the close of business on June 01, 2017. The regulator said the bank had failed to comply with Sections 11(1) read with Section 56 of the Banking Regulation Act, 1949 (AACS) and was operating in violation of Sections 22(3)(a) through 22(3)(e). RBI found that the bank’s operations were detrimental to the interests of present and future depositors and the public, that it was unable to pay its depositors in full as claims accrued, and that there was no scope for revival. RBI also requested the Registrar of Co-operative Societies, Maharashtra, to order winding up and appoint a liquidator.

Why RBI Acted

Licensing breachCustomer protectionOther

The Reserve Bank cancelled the licence of Jamkhed Merchants Co-operative Bank Maryadit, Jamkhed, Dist. Ahmednagar, Maharashtra, because it did not comply with Sections 11(1) read with Section 56 of the Banking Regulation Act, 1949 (AACS) and was in violation of Sections 22(3)(a) to 22(3)(e). RBI stated the bank’s operations were being carried out in a manner detrimental to the interests of present and future depositors and the public, that it was not in a position to pay depositors in full as and when claims accrued, and that its financial position left no scope for revival. RBI also requested the Registrar of Co-operative Societies, Maharashtra to initiate winding up and appoint a liquidator.

Operating Impact

The bank can no longer conduct the business of banking with immediate effect. Liquidation proceedings are to begin, and depositor repayment will move forward under the DICGC framework, with eligible repayment capped at ₹1,00,000 per depositor subject to the usual terms and conditions.

Regulatory Basis

  • Sections 11(1) read with Section 56 of the Banking Regulation (B R) Act, 1949 (AACS)
  • Section 22(3)(a)
  • Section 22(3)(b)
  • Section 22(3)(c)
  • Section 22(3)(d)
  • Section 22(3)(e)
  • Section 5 (b) of the B R Act,1949 (AACS)

Action Facts

Primary Impact
License cancellation
Order Date
1 Jun 2017
Effective From
1 Jun 2017
Entities Affected
1
Entity Role
Primary
Entity Type
Co-operative bank