RBI cancels licence of Chatrapur Co-op Bank

Chatrapur Co-operative Bank had ceased to be solvent and all the efforts to revive it had failed

May 29, 2012 4:52 IST | India Infoline News Service
On 23rd May, the Reserve Bank of India (RBI) has cancelled the licence of Odisha-based Chatrapur Co-operative Bank as it had ceased to be solvent and all the efforts to revive it had failed.
The Registrar of Co-operative Societies, Odisha government, will issue an order for winding up the bank and appoint a liquidator for the bank. On liquidation, every depositor is entitled to repayment of his deposits up to a monetary ceiling of Rs. 1 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC) under usual terms.
The latest inspection as on 31 March 2011 revealed that there was no improvement in the bank’s financials. The net worth of the bank was declined to Rs. 104.43 lakh. The bank's funds had been totally wiped out and deposits had also been eroded to 64%. Thus, the bank had not complied with the provisions of Section 11(1) and Section 22 (3) (a) of the Act. CRAR of the bank had declined 197% and its accumulated losses stood at Rs. 136.25 lakh.
The bank failed to maintain the required CRR and SLR during the period under review and it also did not comply with the provisions of Section 18 and 24 of the Act. The bank had violated RBI's directions issued under Section 35 (A) of the Act by way of setting off of loan amount with FDs and also allowing refund of share capital in cash to share holders. The bank continued to have liquidity problem and could not even allow withdrawal of amount sanctioned under hardship cases.

Invest wise with Expert advice



Open Demat Account

Invest wise with Expert advice

By continuing, I accept the Terms & Conditions and agree to receive updates on Whatsapp