Skip to Main Content

Shri Balasheb Satbhai Merchants Co-operative Bank Ltd., Kopergaon, Ahmednagar

Co-operative bankKopergaon, 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

30 Mar 2007

Case Brief

The Reserve Bank of India cancelled the licence of Shri Balasheb Satbhai Merchants Co-operative Bank Ltd., Kopergaon, Ahmednagar, Maharashtra on March 29, 2007. RBI said the bank had ceased to be solvent, its financial position had worsened over time, and all efforts to revive it in consultation with the Government of Maharashtra had failed. A statutory inspection indicated impaired finances, later scrutiny showed a precarious position, and RBI had already issued Section 35A directions in October 2004. After a show-cause notice and examination of the reply, RBI concluded there was no viable revival plan and cancelled the licence. RBI also requested the Registrar of Co-operative Societies, Maharashtra to initiate winding up and appoint a liquidator.

Why RBI Acted

Capital & exposure normsGovernance oversightLicensing breach

RBI cancelled the licence of Shri Balasheb Satbhai Merchants Co-operative Bank Ltd., Kopergaon, Ahmednagar, Maharashtra after repeated inspections and review showed the bank had ceased to be solvent, its financial position had deteriorated from impaired to precarious, and revival attempts in consultation with the Government of Maharashtra had failed. RBI had earlier issued directions under Section 35A of the Banking Regulation Act, 1949 (as applicable to co-operative societies) and later issued a show-cause notice on November 21, 2006. After examining the reply and finding no viable revival plan and remote chances of recovery, RBI took the extreme step of cancelling the licence and requested winding-up and appointment of a liquidator.

Operating Impact

The bank can no longer carry on banking business, including accepting or repaying deposits. Liquidation proceedings will begin, and depositors will be repaid subject to DICGC coverage and applicable terms, up to the prescribed insurance ceiling. The cancellation affects the bank and its depositors directly.

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
29 Mar 2007
Effective From
29 Mar 2007
Entities Affected
1
Entity Role
Primary
Entity Type
Co-operative bank