|
In view of the fact that the Dhansura People's
Co-operative Bank Ltd., Dhansura Gujarat, had ceased to be solvent, all efforts
to revive it in close consultation with the Government of Gujarat had failed
and the depositors were being inconvenienced by continued uncertainty, the Reserve
Bank of India delivered the order cancelling its licence to the bank after the
close of business on February 15, 2006 . The Registrar of Co-operative Societies,
Gujarat 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 Dhansura People's Co-operative Bank Ltd., Dhansura, Gujarat
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 faced a liquidity
crisis and was issued directions under Section 35A of the Banking Regulation
Act, 1949 (AACS) with effect from the close of business of June 19, 2004, prohibiting
it from granting or renewing loans and advances. The inspection of the bank
with reference to its position as on December 31, 2004 revealed deterioration
in its financial condition. Its deposits were getting eroded as realisable value
of paid-up capital and reserve was in the negative. The directions issued earlier
were further modified vide directions dated June 20, 2005 prohibiting the bank
from accepting fresh deposits and restricting repayment of deposits up to Rs
1000 per depositor to prevent preferential repayment of deposits by the bank.
Thereafter, the Reserve Bank issued a notice to the bank on June 25, 2005 asking
it to show cause as to why the licence granted to it to conduct banking business
should not be cancelled. As the bank did not have a viable plan of action for
revival and the chances of its revival were remote, the Reserve Bank of India
took the extreme measure of cancelling 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 Dhansura
People's Co-operative Bank Ltd., Dhansura, the amount insured as per the DICGC
Act, will be set in motion.
Consequent to the cancellation of its licence,
the Dhansura People's Co-operative Bank Ltd., Dhansura 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 S.Rajgopal, General Manager, Urban Banks Department, Reserve Bank of India,
Ahmedabad. His contact details are as below:
Postal Address :
Urban Banks Department, Reserve Bank of India,
La Gajjar Chambers, Ashram Road, P. B. No. 1,
Ahmedabad 380 009.
Telephone Number : (079) 2658-5184,
Fax Number : (079) 26584853.
P.V.Sadanandan
Manager
Press Release: 2005-2006/1041
|