RBI rejects licence application of Birbhum District Central Co-operative
Bank
The Reserve Bank of India has said it has rejected licence application of Birbhum District Central Co-operative Bank after it found that the bank failed to comply with relaxed licensing conditions. “In view of the fact that the Birbhum DCCB has failed to comply with relaxed licensing conditions set by the Reserve Bank of India by September 30, 2012, in consultation with NABARD, the Reserve Bank of India, on May 15, 2014 delivered the order rejecting licence application to the above mentioned bank for conducting banking business in India,” the central bank said in a press release. RBI said that it has rejected the licence application of Birbhum DCCB in order to protect the interest of the depositors. The inspection of the bank with reference to its position as on March 31, 2012 by NABARD revealed deterioration in its financial condition. The deposits were getting eroded as the realisable value of its paid-up capital and reserves were in the negative. In view of the precarious financial position of the bank, the Reserve Bank issued show cause notices to the bank on March 07, 2013 asking it to show cause as to why the licence application for conducting banking business should not be rejected. Further, special scrutiny of the bank with respect to its financial position as on March 31, 2013 by NABARD revealed no significant improvement in financials of the bank. As the bank did not have a viable plan of action for revival and the chances of their revival were remote, the Reserve Bank of India has to reject the licence application of the bank in the interests of the depositors.
The Reserve Bank of India has said it has rejected licence application of Birbhum District Central Co-operative Bank after it found that the bank failed to comply with relaxed licensing conditions. “In view of the fact that the Birbhum DCCB has failed to comply with relaxed licensing conditions set by the Reserve Bank of India by September 30, 2012, in consultation with NABARD, the Reserve Bank of India, on May 15, 2014 delivered the order rejecting licence application to the above mentioned bank for conducting banking business in India,” the central bank said in a press release. RBI said that it has rejected the licence application of Birbhum DCCB in order to protect the interest of the depositors. The inspection of the bank with reference to its position as on March 31, 2012 by NABARD revealed deterioration in its financial condition. The deposits were getting eroded as the realisable value of its paid-up capital and reserves were in the negative. In view of the precarious financial position of the bank, the Reserve Bank issued show cause notices to the bank on March 07, 2013 asking it to show cause as to why the licence application for conducting banking business should not be rejected. Further, special scrutiny of the bank with respect to its financial position as on March 31, 2013 by NABARD revealed no significant improvement in financials of the bank. As the bank did not have a viable plan of action for revival and the chances of their revival were remote, the Reserve Bank of India has to reject the licence application of the bank in the interests of the depositors.
