The Katkol Co-operative Bank Ltd., Katkol, Karnataka

The Reserve Bank cancelled the licence of The Katkol Co-operative Bank Ltd., Katkol, Karnataka after concluding that it had ceased to be solvent, all efforts to revive it in consultation with the Government of Karnataka had failed, and continued uncertainty was inconveniencing depositors. The release says statutory inspections revealed severe liquidity problems and further deterioration in the bank's financial position, which had become precarious. The RBI had earlier placed the bank under directions under Section 35A of the Banking Regulation Act, 1949 (AACS) on 03 August 2006, and later issued a show-cause notice on 11 February 2009 before taking the extreme measure of cancellation.

The bank can no longer conduct banking business, accept deposits, or repay deposits except through liquidation/insured-deposit settlement mechanisms. The Registrar is to move winding-up proceedings and appoint a liquidator, and depositors may receive insured repayment up to the DICGC ceiling of Rs. 1,00,000 per depositor. The effective cancellation is after the close of business on July 03, 2009.