Ahmedabad: The Reserve Bank of India has cancelled Gujarat-based Natpur Co-operative Bank Ltd's licence yesterday as "all efforts to revive it failed".
The depositors were being unconvenienced by continued uncertainty, RBI said in a statement.
The Registrar of Co-operatives Societies, Gujarat has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank, RBI said.
On liquidation every depositor is entitled to repayment of his deposits up to a monetary ceiling of Rs one lakh from the Deposit Insurance and Credit Gurantee Corporation (DIGC), the Central Bank said.
In order of the severe liquidity crunch facedby the bank it was placed under Directions under Section 35A of the Banking Regulation Act, 1949(AACS) with effect from Jan 16, 2002. Subsequent inspection also revealed deterioration of the bank's financial condition, RBI said.
RBI issued the bank a show cause notice in December 2004 and to justify its licence. The bank, however, failed to provide a viable plan of action for revival.
With this cancellation of its licence and after commencement of liquidation proceedings, the process of paying the depositors of Natpur Co-operative Bank Ltd, the amount insured as per the DICGC Act, will be set in motion, said RBI.
Consequent to the cancellation of its licence, the Natpur Co-operative Bank Ltd, Nadiad is prohibited from carrying on "banking business" as defined in Section 5 (b) of the banking Regulation Act 1949 (AACS) including acceptance and repayment of deposits.
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