The Laxmeshwar Urban Co-operative Credit Bank Ltd, Laxmeshwar, Karnataka

The Reserve Bank of India cancelled the licence of The Laxmeshwar Urban Co-operative Credit Bank Ltd., Laxmeshwar, Karnataka after concluding that the bank had ceased to be solvent. The release states that repeated efforts to revive the bank in consultation with the Government of Karnataka failed, and statutory inspections for the years ending March 31, 2005, March 31, 2006 and March 31, 2007 showed a precarious financial position with no improvement and no scope for turnaround. A show-cause notice for cancellation was issued on August 23, 2007, and after considering the bank's reply and all revival options, RBI took the extreme measure of cancelling the licence in the interest of depositors. The release also notes that the Registrar of Co-operative Societies, Karnataka has been requested to order winding up and appoint a liquidator.

The bank can no longer carry on banking business, including accepting or repaying deposits. Liquidation proceedings begin, and depositors will be entitled to insured repayment up to Rs. 1,00,000 per depositor under DICGC, subject to the liquidation process. The prior withdrawal restriction is superseded by the licence cancellation and resulting shutdown of banking operations.