Tandur Mahila Co-operative Urban Bank Ltd., Tandur (Andhra Pradesh)

RBI cancelled the banking licence of Tandur Mahila Co-operative Urban Bank Ltd., Tandur (Andhra Pradesh) because the bank's operations were practically defunct, there was no realistic scope for revival, and efforts to ensure regulatory compliance had failed. The inspection findings showed very high gross NPAs, accumulated losses, non-availability of books of accounts for subsequent inspection, continued non-submission of statutory returns since November 2008, misappropriation of funds (including an enquiry finding misappropriation of Rs 40.52 lakh), staff involvement in mismanagement, failure to maintain minimum capital and reserves under Section 11(1), and inability to pay existing and future depositors in full. RBI also issued a show-cause notice on May 03, 2011; the reply was unsatisfactory and no viable action plan was available. The cancellation was ordered on August 22, 2011, after close of business on August 30, 2011, and liquidation proceedings were to follow.

The bank may no longer carry on banking business, including acceptance and repayment of deposits, once the cancellation takes effect and liquidation proceeds. Depositors will have their claims handled through liquidation, subject to Deposit Insurance and Credit Guarantee Corporation terms and conditions, up to the applicable insurance ceiling. The Registrar of Co-operative Societies was asked to begin winding-up proceedings and appoint a liquidator.