Sarvodaya Mahila Co-operative Bank Ltd., Burhanpur, (Madhya Pradesh)

RBI cancelled the banking licence of Sarvodaya Mahila Co-operative Bank Ltd., Burhanpur, Madhya Pradesh, after concluding that the bank had ceased to be solvent and that efforts to revive it in consultation with the Government of Madhya Pradesh had failed. The release says the bank had been classified weak, its financial position had become precarious and continued to deteriorate, deposits were being eroded, and the realisable value of paid-up capital and reserves was negative. RBI had earlier issued a show-cause notice and also placed the bank under directions restricting operations with effect from May 27, 2005. The cancellation was described as a final/extreme step in the interest of depositors, and the Registrar of Cooperative Societies was requested to initiate winding up and appoint a liquidator.

The bank cannot conduct banking business anymore, including accepting or repaying deposits. Liquidation proceedings are to begin, and depositors will be entitled to insured repayment up to Rs. 1,00,000 under the DICGC framework, subject to liquidation processing.