Financial Daily from THE HINDU group of publications
Friday, Jun 10, 2005
Financial Daily from THE HINDU group of publications Friday, Jun 10, 2005 |
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Money & Banking
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Co-operatives Gujarat co-op banks' licence cancelled Our Bureau
Mumbai , June 8 THE Reserve Bank of India has cancelled the licence of two co-operative banks in Gujarat, as they ceased to be solvent. The two banks are the Royale Co-operative Bank Ltd, Surat, and Shri Swaminarayan Co-operative Bank Ltd, Vadodara, according to an RBI release. The Registrar of Co-operative Societies, Gujarat, has been requested for winding up of both banks and appointing a liquidator. The central bank also said that every depositor of these banks is covered by the Deposit Insurance and Credit Guarantee Corporation (DICGC) and, on liquidation of the bank, is entitled to repayment of deposits up to a ceiling of Rs 1 lakh. The liquidator is required to send claims of all depositors to DICGC. The release stated that inspections of the banks conducted by the RBI had revealed deficiencies in their working. The banks had become insolvent with negative net worth, negative CRAR, high NPAs, and significant erosion of deposits. Both banks have been barred from carrying on business such as accepting and paying deposits. The Royale Bank was suspended from membership of Surat Bankers' Clearing House with effect from October 6, 2004. The process of paying depositors will begin after the liquidation proceedings are initiated by the Gujarat Government, the release added. Depositors can approach the Urban Banks Department, RBI, Ahmedabad, for information.
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