Sumerpur Mercantile Urban Cooperative Bank Limited, Sumerpur, Pali, Rajasthan

RBI cancelled the licence of Sumerpur Mercantile Urban Cooperative Bank Limited, Sumerpur, Pali, Rajasthan. The bank must stop banking business, including accepting and repaying deposits, from close of business on February 28, 2024.

The bank must cease banking operations and cannot accept or repay deposits after close of business on February 28, 2024. Depositors become entitled, on liquidation, to DICGC insurance claims up to the statutory ceiling, subject to applicable conditions; RBI noted that most depositors were eligible to receive their full deposits from insurance based on the bank’s submitted data.

• Section 11(1) of the Banking Regulation Act, 1949
• Section 22(3)(d) read with Section 56 of the Banking Regulation Act, 1949
• Sections 22(3)(a), 22(3)(b), 22(3)(c), 22(3)(d) and 22(3)(e) read with Section 56 of the Banking Regulation Act, 1949

+2 more in the case brief

RBI placed Sumerpur Mercantile Urban Co-operative Bank Ltd. under Section 35A Directions. The bank faces restrictions on lending, investments, liabilities, fresh deposits, payments, asset disposal, and depositor withdrawals.

The bank must operate under tight RBI restrictions until the directions expire or are modified. Customers cannot freely withdraw deposits, and the bank cannot expand lending, take fresh deposits, or undertake several balance-sheet actions without RBI approval.

• Section 35 A of the Banking Regulation Act, 1949
• Section 56 of the Banking Regulation Act, 1949