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The Anand People's Co-operative Bank Ltd., Anand, Gujarat

Co-operative bankAnand, Gujarat

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

28 Oct 2005

Case Brief

The Reserve Bank of India cancelled the licence of The Anand People's Co-operative Bank Ltd., Anand, Gujarat, effective October 26, 2005. RBI said the cooperative bank had ceased to be solvent, its financial position had continued to worsen, and the chances of revival were remote after all options for revival were examined. The bank had earlier been placed under directions restricting its operations from August 30, 2002 after being classified as 'sick'. RBI noted erosion of deposits and a negative position in paid-up capital and reserves. The cancellation was described as a final step to protect depositors’ interests, and RBI also requested the Registrar of Cooperative Societies, Gujarat to initiate winding up and appoint a liquidator.

Why RBI Acted

Governance oversightCapital & exposure normsCustomer protectionLicensing breach

The Reserve Bank of India cancelled the licence granted to The Anand People's Co-operative Bank Ltd., Anand, Gujarat on October 26, 2005. RBI said the bank had ceased to be solvent, revival efforts in consultation with the Government of Gujarat had failed, and there was no viable revival plan. The bank had been classified as 'sick' based on inspection findings, was already under directions restricting its operations from August 30, 2002, and subsequent inspection showed further deterioration with erosion of deposits and negative realisable value of paid-up capital and reserves. The cancellation was taken as a final step in the interest of depositors and was followed by prohibition on carrying on banking business, including acceptance and repayment of deposits, and a request to the Registrar of Cooperative Societies, Gujarat to order winding up and appoint a liquidator.

Operating Impact

The bank can no longer carry on banking business, including accepting or repaying deposits. Depositors must look to the winding-up/liquidation process and DICGC cover up to Rs. 1,00,000 per depositor, while the Registrar of Cooperative Societies, Gujarat is expected to move toward liquidation and appointment of a liquidator.

Regulatory Basis

  • Section 5(b) of the Banking Regulation Act, 1949 (AACS)

Action Facts

Primary Impact
License cancellation
Order Date
26 Oct 2005
Effective From
30 Aug 2002
Entities Affected
1
Entity Role
Primary
Entity Type
Co-operative bank