Shri B.J.Khatal Janata Sahakari Bank Ltd., Sangamner

RBI cancelled the licence of Shri B.J.Khatal Janata Sahakari Bank Ltd., Sangamner, Maharashtra. The bank will be wound up and is prohibited from carrying on banking business.

The bank can no longer conduct banking business and must proceed into liquidation through the co-operative registrar’s winding-up process. Depositors’ claims will be processed subject to DICGC insurance limits, and the bank is prohibited from accepting or repaying deposits outside the liquidation framework. RBI indicated the cancellation took effect after close of business on June 11, 2008.

• 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)

RBI imposed a Rs. 5 lakh penalty on Shri B.J.Khatal Janata Sahakari Bank Ltd., Sangamner. The bank violated RBI directions on lending to directors and related interests.

The bank must bear the monetary penalty and remain compliant with RBI’s restrictions on lending to directors and connected parties. No broader operational restriction is described, but the case signals continuing supervisory scrutiny of related-party lending practices.

• Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies)