Skip to Main Content

The Anand Urban 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 Mar 2007

Case Brief

The Reserve Bank of India cancelled the licence of The Anand Urban Co-operative Bank Ltd., Anand, Gujarat on March 27, 2007. RBI said the bank had ceased to be solvent, revival efforts in consultation with the Government of Gujarat had failed, and the bank's financial position had deteriorated further after special scrutiny. The bank had earlier been placed under Section 35A directions from July 22, 2004 due to a severe liquidity crunch, and a show-cause notice was issued on November 1, 2006. RBI concluded that the bank had no viable revival plan and that cancellation was necessary to protect depositors; it also requested the Registrar of Co-operative Societies, Gujarat to commence winding up and appoint a liquidator.

Why RBI Acted

Capital & exposure normsGovernance oversightCustomer protection

RBI cancelled the licence of The Anand Urban Co-operative Bank Ltd., Anand, Gujarat after concluding that it had ceased to be solvent, faced severe liquidity stress, and had no viable plan for revival. The release states that efforts to revive the bank in consultation with the Government of Gujarat had failed, the bank was under Section 35A Directions from July 22, 2004, and a show-cause notice was issued on November 1, 2006. Special scrutiny as on December 31, 2006 showed further deterioration, negative realisable value of paid-up capital and reserves, and continued erosion of deposits. The cancellation was taken in the interest of depositors and was followed by request for 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 are to begin, and depositors will be paid insured amounts up to the DICGC ceiling of Rs. 1,00,000, subject to the liquidation process.

Regulatory Basis

  • Section 35A of the Banking Regulation Act, 1949(AACS)
  • Section 5(b) of the Banking Regulation Act, 1949 (AACS)

Action Facts

Primary Impact
License cancellation
Order Date
27 Mar 2007
Effective From
22 Jul 2004
Entities Affected
1
Entity Role
Primary
Entity Type
Co-operative bank