In view of the fact that the Nagrik Sahakari
Bank Maryadit, Ratlam, (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 December 7, 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 Nagrik Sahakari Bank Maryadit, Ratlam, (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 'sick' based on the findings of the inspection with reference to its financial
position as on March 31,2002 and placed under rehabilitation. 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 Nagrik Sahakari Bank
Maryadit, Ratlam, precarious as on June 30, 2003, issued a show cause notice
dated February 19, 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
financial position continued to deteriorate and the Reserve Bank of India placed
the bank under directions with effect from March 7, 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 Nagrik Sahakari
Bank Maryadit, Ratlam, the amount insured as per the DICGC Act, will be set
in motion.
Consequent to the cancellation of its licence,
the Nagrik Sahakari Bank Maryadit, Ratlam, 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
Alpana Killawala
Chief General Manager
Press Release; 2005-2006/694
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