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The Sojitra Co-operative Bank Ltd

Co-operative bankSojitra, 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

15 Feb 2017

Case Brief

RBI cancelled the licence of The Sojitra Co-operative Bank Ltd., Dist. Anand (Gujarat), by order dated January 23, 2017. The release says the cancellation was prompted by unsatisfactory financials and compliance record. It also notes that the bank fulfilled the conditions under Section 36(A)(2) to convert into The Sojitra Co-operative Society Ltd. As a result, it ceased to be a co-operative bank under the Banking Regulation Act provisions cited, and it was prohibited from carrying on banking business in India, including accepting and repaying deposits.

Why RBI Acted

Governance oversightReporting & disclosureLicensing breach

The Reserve Bank of India cancelled the licence of The Sojitra Co-operative Bank Ltd., Dist. Anand (Gujarat) by order dated January 23, 2017. The release states that the action was taken in view of the bank’s unsatisfactory financials and compliance record. The bank was advised to go out of the purview of the Banking Regulation Act, 1949 (AACS) and convert into a co-operative society; it had fulfilled the conditions under Section 36(A)(2) for conversion into The Sojitra Co-operative Society Ltd. The release further says the bank ceased to be a co-operative bank under Section 5(cci) read with Section 56 and was prohibited from carrying on banking business in India under Section 22, including acceptance and repayment of deposits.

Operating Impact

The entity can no longer operate as a co-operative bank or conduct banking business, including deposit acceptance and repayment. Existing banking provisions applicable to the co-operative bank cease to apply, and the organization must function as a co-operative society instead. Customers and depositors are affected because normal banking operations have been stopped.

Regulatory Basis

  • Section 36(A)(2) of the Banking Regulation Act, 1949 (AACS)
  • Section 5 (cci) of the Banking Regulation Act, 1949 read with Section 56 of the Act
  • Section 22 of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies) read with Section 56 of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies)
  • Section 5(b) of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies)

Action Facts

Primary Impact
License cancellation
Order Date
23 Jan 2017
Effective From
23 Jan 2017
Entities Affected
1
Entity Role
Primary
Entity Type
Co-operative bank