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Parivartan Co-operative Bank Ltd., Mumbai, Maharashtra

Co-operative bankMumbai, 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

5 Jun 2007

Case Brief

The Reserve Bank of India cancelled the banking licence of Parivartan Co-operative Bank Ltd., Mumbai, Maharashtra, on June 4, 2007. The release says the bank had ceased to be solvent, its financial position was severely impaired, revival efforts had failed, and it had no viable revival plan. RBI had earlier issued operational instructions, advised supersession of the board, and later issued Section 35A directions as the bank's condition deteriorated. After a show-cause notice and review of the reply, RBI took the extreme step of cancelling the licence and requested the Registrar of Co-operative Societies, Maharashtra to issue an order for winding up and appoint a liquidator. Consequent to cancellation, the bank was prohibited from carrying on banking business, including acceptance and repayment of deposits, and depositors would be paid subject to the Deposit Insurance Scheme up to the prescribed ceiling.

Why RBI Acted

Capital & exposure normsGovernance oversight

RBI cancelled the licence of Parivartan Co-operative Bank Ltd., Mumbai, Maharashtra after examining all revival options and issuing a show-cause notice. The release states the bank had ceased to be solvent, its financial position was severely impaired in the statutory inspection, revival efforts in consultation with the Government of Maharashtra failed, and the bank did not have a viable plan of action; RBI also noted directions under Section 35A had previously been issued and the board had been superseded by the Registrar of Co-operative Societies.

Operating Impact

The bank can no longer conduct banking business or accept/repay deposits, and liquidation proceedings will determine repayment to depositors subject to DICGC limits. Depositors are affected immediately, with claims to be settled under the usual insurance terms and conditions. The effective date of the cancellation is June 4, 2007.

Regulatory Basis

  • Section 35 A of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies)
  • Section 5(b) of the Banking Regulation Act, 1949 (AACS)

Action Facts

Primary Impact
License cancellation
Order Date
4 Jun 2007
Effective From
4 Jun 2007
Entities Affected
1
Entity Role
Primary
Entity Type
Co-operative bank