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Kasundia Co-operative Bank Ltd. Howrah (West Bengal)

Co-operative bankHowrah, West Bengal

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

26 Sept 2013

Case Brief

The Reserve Bank of India cancelled the licence of Kasundia Co-operative Bank Ltd., Howrah (West Bengal), effective September 6, 2013. RBI stated that the bank had ceased to be solvent and that the continued uncertainty was inconveniencing depositors. The release also notes a long deterioration in the bank’s financial condition, including heavy deposit erosion, negative net worth, poor asset quality, liquidity stress, violations of RBI directions, and no credible revival or merger proposal. Following the cancellation, the bank was prohibited from carrying on banking business and the Registrar of Co-operative Societies, West Bengal was requested to initiate winding-up and appoint a liquidator.

Why RBI Acted

Capital & exposure normsReporting & disclosureGovernance oversightOther

The Reserve Bank cancelled the banking licence of Kasundia Co-operative Bank Ltd., Howrah, effective September 6, 2013, after finding the bank had ceased to be solvent and that continuation would be against the interests of depositors. The background cites severe deterioration in the bank’s financial position, heavy deposit erosion, weak net worth/CRAR, high NPAs, liquidity constraints, prior violations of RBI directions, and the absence of a viable revival or merger proposal.

Operating Impact

The bank can no longer conduct banking business. Deposit insurance payout processes may be triggered for eligible depositors, subject to DICGC rules and the liquidation process, and the Registrar is expected to commence winding-up and appoint a liquidator. The effective date of cancellation is September 6, 2013.

Regulatory Basis

  • Section 35A of the B. R. Act 1949 (AACS)
  • Section 22 of B.R. Act 1949 (AACS)
  • Section 47A(1)(b) of B.R. Act 1949 read with Section 46(4) of the B.R. Act 1949
  • Section 5(b) of the Banking Regulation Act 1949 (AACS)

Action Facts

Primary Impact
License cancellation
Order Date
6 Sept 2013
Effective From
6 Sept 2013
Entities Affected
1
Entity Role
Primary
Entity Type
Co-operative bank