The Reserve Bank of India cancelled the licence of The Rohe Ashtami Sahakari Urban Bank Ltd., Roha, Dist. Raigad, Maharashtra on September 9, 2008. The bank 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 Registrar of Co-operative Societies has also been requested to issue an order for winding up the bank and appoint a liquidator.  It may be highlighted that on liquidation, every depositor is entitled to repayment of his/her deposits up to a 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 bank was granted licence to commence banking business on October 26, 1987. The statutory inspection of the bank as on March 31, 2006 indicated that its financial position was impaired on which certain operational instructions were issued. The next inspection of bank with reference to its financial position as on March 31, 2007 revealed overall deterioration in its financial position. In order to conserve its liquidity and prevent preferential payments, the bank was issued directions under Section 35 A of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies) restricting its operations, including placing a ceiling of Rs. 500/- on withdrawal of deposits.

The bank was served a notice on May 2, 2008 to show cause as to why the licence granted to it should not be cancelled and why steps should not be taken to wind up the bank. The reply submitted by the bank was not found satisfactory and hence not acceptable.

Keeping in view the impaired financial position of the bank and the absence of any concrete proposal for merger, the possibility of revival of the bank was remote. Therefore, the Reserve Bank of India took the extreme measure of cancelling the licence in the interest of the bank's depositors. With the cancellation of its licence and commencement of liquidation proceedings, the process of paying the depositors of the bank will be set in motion subject to the terms and conditions of the Deposit Insurance Scheme.

Consequent to the cancellation of its licence, The Rohe Ashtami Sahakari Urban Bank Ltd., is prohibited from carrying on ‘banking business’ as defined in Section 5(b) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies).

For any clarifications, depositors may approach Shri P.K.Arora, Deputy General Manager, Urban Banks Department, Reserve Bank of India, Mumbai. His contact details are Reserve Bank of India, Urban Banks Department, Mumbai Regional Office, Second Floor, Garment House, Mumbai 400 018. Tel.No. (022) 2493 5348, Fax (022) 2493 5495. email

G. Raghuraj
Deputy General Manager

Press Release : 2008-2009/378