Reserve Bank of India has cancelled the licence of Shri Swami Samarth Urban Co-operative Bank Ltd., Naldurg, Osmanabad. The order was made effective from the close of business on April 30, 2015.
The Registrar of Co-operative Societies Maharashtra has also been requested to issue an order for winding up of the bank and appoint a liquidator.
The Reserve Bank cancelled the licence of the bank as the financial position was precarious and there was no scope for its revival. The bank was not in a position to pay its present and future depositors in full, as and when their claims accrue.
The affairs of the bank were being conducted in a manner detrimental to the interest of its present and future depositors and public interest would have been adversely affected if the bank was allowed to carry on its banking business any further, read a press release from the regulator.
Consequent to the cancellation of its licence, Shri Swami Samarth Urban Co-operative Bank is prohibited from conducting the business of ‘banking’ and the process of paying the depositors of has been set into motion.
This UCB was granted licence in 1997. In view of the deteriorating financial position, the bank was placed under all inclusive directions.
The latest statutory inspection of the bank conducted on March 31, 2014, revealed that the financial position of the bank had further deteriorated and the bank did not have adequate assets to meet its outside liabilities.
There was also no viable merger proposal under consideration. With no prospect of revival of the bank on its own or with outside support, the Reserve Bank decided to cancel the licence of the bank.