The Reserve Bank of India (RBI) has cancelled the licence of the Maharashtra-based Swami Samarth Sahakari Bank Ltd as the bank turned insolvent and failed to comply with the minimum requirement of capital for a bank.
The RBI delivered the order cancelling its licence to the co-operative bank, effective from the close of business as on December 28, 2012. The bank ceased to be solvent as all efforts to revive it in close consultation with the Government of Maharashtra had failed, the RBI said in a statement.
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. On liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of Rs 1 lakh from the deposit insurance and credit guarantee corporation, the RBI said.
The bank was granted a licence by the RBI on February 13, 1988 to commence banking business.
As on December 31, 2011, the bank’s networth was at (-) Rs 495.50 lakh leading to deposits erosion of 37 per cent. The CRAR was assessed at (-) 49.1 per cent. The gross and net NPAs formed 56.5 per cent and 50.5 per cent of the gross and net advances respectively.
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