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In view of the fact that Purna Nagari Sahakari
Bank Ltd., Purna, Dist.Parbhani (Maharashtra), had ceased to be solvent, all
efforts to revive it in close consultation with the Government of Maharashtra
had failed and the depositors were being inconvenienced by continued uncertainty,
the Reserve Bank of India delivered the order canceling its licence to the bank
on July 1, 2006. The Registrar of Co-operative Societies, Maharashtra 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/-(Rupees
one lakh only) from the Deposit Insurance and Credit Guarantee Corporation (DICGC)
under usual terms and conditions.
The Reserve Bank of India decided to cancel
the licence of Purna Nagari Sahakari Bank Ltd., Purna, Dist.Parbhani (Maharashtra)
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 inspection of the bank
with reference to its position as on September 30, 2004 indicated that its financial
position was precarious. In view of the precarious financial position of the
bank to protect the interests of the depositors, directions under Section 35A
of the Banking Regulation Act, 1949 (As Applicable to Cooperative Societies)
were issued to the bank vide order dated February 1, 2005. A notice to the bank
calling on it to show cause as to why its banking license should not be cancelled
was issued to the bank on March 29, 2005. Considering the bank's reply dated
April 28, 2005 to the show cause notice it was decided to review its financial
position as on June 30, 2005. The inspection of the bank conducted with reference
to its financial as on June 30, 2005 revealed further deterioration in its financial
condition. Its deposits were getting eroded as the realizable value of paid-up
capital and reserves was in the negative. The Reserve Bank issued a notice to
the bank on January 2, 2006 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 its revival and the chances of its revival
were remote, the Reserve Bank of India took the extreme measure of canceling
the licence of the bank in the interests of the bank's depositors. With the
cancellation of its licence and commencement of liquidation proceedings, the
process of paying the depositors of Purna Nagari Sahakari Bank Ltd., Purna,
Dist.Parbhani (Maharashtra) will be set in motion subject to the terms and conditions
of the Deposit Insurance Scheme.
Consequent to the cancellation of its licence,
Purna Nagari Sahakari Bank Ltd., Purna, Dist.Parbhani (Maharashtra) is prohibited
from carrying on ‘banking business’ as defined in Section 5(b) of the Banking
Regulation Act, 1949 (As Applicable to Cooperative Societies) including acceptance
and repayment of deposits.
For any clarifications, depositors may approach
Shri Anand Prakash, General Manager, Reserve Bank of India, Urban Banks Department,
Nagpur. His contact details are as below.
Postal Address: Urban Banks Department,
Reserve Bank of India, Nagpur Regional Office, Additional Office Building, East
High Court Road, Nagpur-440001. Telephone Number (0712) 2538696; Fax Number
(0712) 2552896.
G. Raghuraj
Deputy General Manager
Press Release : 2006-2007/10
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