In view of the fact
that Shri Kalmeshwar Urban Co-operative Bank Ltd., Hole-Alur, Dist.Gadag (Karnataka),
had ceased to be solvent, all efforts to revive it in close consultation with
the Government of Karnataka 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 February 28, 2007. The Commissioner for Co-operation
and Registrar of Co-operative Societies, Karnataka has also been requisitioned
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 licence of Shri Kalmeshwar Urban Co-operative
Bank Ltd., Hole-Alur, Dist.Gadag (Karnataka) 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 March
31, 2006 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 October 06,
2006. A notice to the bank calling on it to show cause as to why its banking license
should not be cancelled was issued on November 14, 2006. As no reply was received
from the bank to the Show Cause Notice issued to it in spite of reminders, it
was concluded that the bank had nothing to state in this regard. 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 Shri Kalmeshwar Urban Co-operative Bank Ltd., Hole-Alur, Dist.Gadag
(Karnataka) will be set in motion subject to the terms and conditions of the Deposit
Insurance Scheme. Consequent to the
cancellation of its licence, Shri Kalmeshwar Urban Co-operative Bank Ltd., Hole-Alur,
Dist.Gadag (Karnataka) 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 C.R.G.Nair, Deputy General Manager,
Reserve Bank of India, Urban Banks Department, Bangalore. His contact details
are as below; Postal Address: Urban
Banks Department, Reserve Bank of India, Bangalore Regional Office, 10/3/8, Nrupatunga
Road, Bangalore- 560 001. Telephone Number: (080) 22291696, Fax Number: (080)
22293668/22210185. G. Raghuraj
Deputy General Manager Press
Release : 2006-2007/1185 |