The Reserve Bank of India Monday cancelled the license of Gujarat Industrial Co-operative Bank (GICB) as it ceased to be solvent. The RBI delivered the order cancelling its licence to the bank on November 11, after all efforts to revive it in consultation with the Gujarat government had failed. The Central Registrar of Co-operative Societies, has also been asked to issue an order for winding up the urban cooperative bank and appoint a liquidator for it, an official statement said today. On liquidation, every depositor of the bank shall be entitled to repayment of deposits up to a monetary ceiling of Rs one lakh, from the Deposit Insurance and Credit Guarantee Corporation (DICGC), it said. The revival plan submitted by the bank in 2010 was considered, but was found to be not viable as it was not in conformity with the RBI guidelines, it stated. The merger proposal from Saraswat Bank, Mumbai failed to materialise, it said. The inspection of the bank by RBI on 31st March, 2010 showed its deteriorating financial health. The bank's net worth and Capital to Risk Weighted Assets Ratio (CRAR), the ratio used to protect depositors and promote stability, had gone into negative. The bank's net worth and CRAR went in negative and stood at (-) Rs29,184.18 lakh and (-) 365 per cent, respectively during an inspection on 31st March,2010, the statement said. The assessed net loss of bank stood at Rs3,963 lakh as against reported net loss of Rs3,872.93 lakh. The gross and net non-performing assets (NPA's) formed 85.4 and 21.3 per cent of the gross and net advances respectively. A criminal complaint has been filed by the administrator of the bank against the ex-Board of Directors for their acts of omissions and commissions leading to huge losses to the bank, the statement said. The RBI issued several show cause notices to the bank asking it as to why the licence granted to it on September 29, 1999 to conduct banking business should not be cancelled.
DNA
