In view of the fact that the Sarvodaya Nagrik
Sahakari Bank Ltd., Visnagar, 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, on February 02, 2007 delivered the Order cancelling its licence
to the bank. 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 Sarvodaya Nagrik Sahakari Bank Ltd., Visnagar, Gujarat as
a final step after examining all the options for revival of the bank and in
order to protect the interests of the depositors. In view of the severe liquidity
crunch faced by the bank, it was placed under Directions under section 35A of
the Banking Regulation Act, 1949(AACS) with effect from January 03, 2004. The
inspection of the bank with reference to its position as on March 31, 2006 revealed
deterioration in its financial condition. Its deposits were getting eroded as
realisable value of paid-up capital and reserve was in the negative. In view
of its precarious financial position, the Reserve Bank issued a show cause notice
to the bank on November 13, 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 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 Sarvodaya Nagrik Sahakari Bank Ltd, Visnagar the
amount insured as per the DICGC Act, will be set in motion.
Consequent to the cancellation of its licence,vide
Speaking Order dated February 02, 2007, the Sarvodaya Nagrik Sahakari Bank Ltd.,
Visnagar 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 clarification, 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 GajjarChambers, Ashram Road, P. B. No. 1, Ahmedabad 380 009.
Telephone Number: (079) 2658-5184, Fax Number: (079) 26584853
Alpana Killawala
Chief General Manager
Press Release: 2006-2007/1067
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