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In view of the fact that the Sarvodaya Mahila
Co-operative Bank Ltd., Burhanpur, (Madhya Pradesh) had ceased to be solvent,
efforts to revive it in consultation with the Government of Madhya Pradesh had
failed and the depositors of the bank were being inconvenienced by continued
uncertainty, the Reserve Bank of India, on November 17, 2005, delivered the
order canceling its licence to the bank. The Registrar of Cooperative Societies,
Madhya Pradesh has also been requested to issue an order for winding up the
bank and appoint a liquidator for the bank. It may be highlighted that on liquidation
every depositor is entitled to repayment of his deposits up to a monetary ceiling
of Rs. 1,00,000/- from the Deposit Insurance and Credit Guarantee Corporation
(DICGC).
The Reserve Bank of India decided to cancel
the licence of the Sarvodaya Mahila Co-operative Bank Ltd., Burhanpur, (Madhya
Pradesh) as a final step after examining all the options for revival of the
bank and in order to protect the interest of the depositors. The bank had been
classified as 'weak' based on the findings of the inspection with reference
to its financial position as on March 31,2001. The bank's financial position,
however, continued to worsen and its deposits were getting eroded as realisable
value of paid-up capital and reserve was in the negative. The Reserve Bank had,
after finding the financial position of Sarvodaya Mahila Co-operative Bank Ltd.
precarious as on December 31, 2003, issued a show cause notice dated July 01,
2004, to the bank asking it to show cause as to why the licence granted to it
to conduct banking business should not be cancelled. The bank’s overall financial
position continued to deteriorate and the Reserve Bank of India placed the bank
under directions with effect from May 27, 2005, restricting its operations.
As the continuance of the bank was untenable, the Reserve Bank of India took
the extreme measure of cancelling the licence of the bank in the interest of
the bank's depositors. With the cancellation of its licence and after commencement
of liquidation proceedings, the process of paying the depositors of Sarvodaya
Mahila Co-operative Bank Ltd., the amount insured as per the DICGC Act, will
be set in motion.
Consequent to the cancellation of its licence,
the Sarvodaya Mahila Co-operative Bank Ltd., Burhanpur, 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.
For any clarifications, depositors may approach
Shri. M.K.Ray, Deputy General Manager, Urban Banks Department, Reserve Bank
of India, Bhopal. His contact details are as below:
Postal Address: Urban Banks Department, Reserve
Bank of India, P.B. No. 32, Hoshangabad Road, Bhopal – 462 016.
Telephone Number: (0755) 2555072
Fax Number: (0755) 2554515
G. Raghuraj
Deputy General Manager
Press Release: 2005-2006/611
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