The Reserve Bank of India decided to cancel the licence of the Ichalkaranji Jiveshwar Sahakari Bank Ltd., Ichalkaranji, Dist., Kolhapur, Maharashtra, as a final step after examining all the options for revival of the bank and in order to protect the interests of the depositors. The inspection of the bank with reference to its financial position as on March 31,, 2003 revealed that the bank's financial position was unsatisfactory. The bank was, therefore, issued directions under Section 35A of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies) with effect from the close of business of May 14, 2003 including a cap of Rs 1000/- on withdrawal of deposits by an individual depositor. On the basis of the RBI's requisition dated September 20, 2003 the Board of Directors of the bank was superseded on September 26, 2003 for mismanagement of the bank's affairs. The subsequent inspection of the bank conducted with reference to its position as on March 31, 2005 revealed further deterioration in its financial condition. Its deposits were getting eroded as realizable value of paid-up capital and reserves was in the negative. The Reserve Bank had issued a notice to the bank on September 02, 2005 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 its 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 interests of the bank's depositors. With the cancellation of its licence and commencement of liquidation proceedings, the process of paying the depositors of the Ichalkaranji Jiveshwar Sahakari Bank Ltd., Ichalkarani, Dist., Kolhapur, Maharashtra, the amount insured as per the DICGC Act, will be set in motion.

Press Release : 2005-2006/1553