The Reserve Bank has cancelled licence of Rajasthan's Ajmer Urban Co-operative Bank as the bank ceased to be solvent.
"The Reserve Bank has from the close of business as on September 19, 2014, cancelled the licence of the Ajmer Urban Co-operative Bank Ltd. Ajmer (Rajasthan) as it had ceased to be solvent, all efforts to revive it had failed and the depositors were being inconvenienced by continued uncertainty," RBI said in a notification.
The registrar of Co-operative Societies, Rajasthan has also been asked to issue an order for winding up the bank and appoint a liquidator.
On liquidation, every depositor will be entitled to repayment of his/her deposits up to a monetary ceiling of 'Rs one lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC), RBI said.
"Consequent to the cancellation of its licence, The Ajmer Urban Co-operative Bank is prohibited from carrying on banking business," RBI added.
The bank was granted a licence by the RBI on December 18, 2000 to commence banking business.
Subsequently, in view of the large amount of NPAs, substantial accumulated losses, poor chances of recovery for improvement in financial health of the bank, revival prospects of the bank in the near future became bleak.
Various merger proposals or options were explored by the bank at the instance of the State Federation. However, there was no positive outcome.
