Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: Central Excise rule to resale the machines to a new company :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARD :: cpt :: ACCOUNTING STANDARDS :: VAT RATES :: articles on VAT and GST in India :: ARTICLES ON INPUT TAX CREDIT IN VAT :: due date for vat payment :: TDS :: form 3cd :: empanelment :: VAT Audit :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: list of goods taxed at 4%
 
 
Latest Circulars »
 Requirement of customer due diligence and need for maintenance of records
 Card Not Present transactions – Relaxation in Additional Factor of Authentication for payments upto ₹ 2000/- for card network provided authentication solutions
 Auction of Government of India Dated Securities December 05, 2016
 Withdrawal of Legal Tender Character of the old Bank Notes in the denominations of ₹ 500/- and ₹ 1000/- (Updated as on December 05, 2016)
 RBI-Investment under PIS in M/s Laurus Labs Limited by FIIs/FPIs upto 49 per cent and NRIs upto 24 per cent
 RBI-Issuance of 35 days Cash Management Bills under Market Stabilisation Scheme (MSS)
 RBI-Information from Unauthenticated Sources – Advisory to banks
 RBI-Aadhaar-based Authentication for Card Present Transactions
 RBI-External Commercial Borrowings (ECB)
 Issuance of 28 days Cash Management Bills under Market Stabilisation Scheme (MSS)
 Withdrawal of Legal Tender Character of the existing Bank Notes in the denominations of ₹ 500/- and ₹ 1000/- (Updated as on November 30, 2016)

RBI-Reserve Bank Cancels the Licence of Vaishali Urban Co-operative Bank Ltd. (Jaipur)
June, 20th 2013

In view of the fact that The Vaishali Urban Co-operative Bank Ltd. Jaipur, Rajasthan, has ceased to be solvent, all efforts to revive it having failed and the depositors being inconvenienced by the continued uncertainty, the Reserve Bank of India delivered the order cancelling its licence to the bank on June 12, 2013. The Registrar of Co-operative societies, Government of Rajasthan has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank. It may be highlighted that on liquidation, every depositor is entitled   to repayment of his/her  deposits up to a monetary ceiling of  `1,00,000/- (Rupees one lakh  only)  from the Deposit Insurance and Credit Guarantee Corporation under usual terms and conditions.

The bank was granted a licence by the Reserve Bank of India on March 2, 1998 to conduct  banking business under Section 22 of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies).

The statutory inspection conducted under Section 35 of the Act with reference to its financial position as on March 31, 2008 had reported large scale irregularities in the loans and advances/overdraft relating to directors and their relatives. As involvement of management in these irregularities was apparent, the Registrar of Co-operative Societies, Rajasthan had superseded the Board and appointed an Administrator on February 27, 2009 on the requisition of the Reserve Bank of India.

The statutory inspection of the bank as on March 31, 2009, indicated that  the bank’s net worth was fully eroded, the deposits were eroded to the extent of  28.51%  of total deposits and the gross NPAs were 18.66%. Further the bank failed to report fraud involving fictitious accounts and understatement of liabilities to the RBI.

Accordingly, directions under Section 35 A of B. R. Act, 1949 (AACS) were imposed on the bank with effect from the close of business on July 12, 2010 restricting, inter alia, withdrawal in excess of ` 1000/- per deposit account.

Keeping in view the deteriorating financial position and irregularities stated above a Show Cause Notice (SCN) was issued to the bank on November 04, 2011. The reply of the bank dated December 12, 2011 to the SCN was not found satisfactory.

The statutory inspection as on March 31, 2010, and 2011 also indicated no improvement and the bank continued to function in violation of the provisions of Section 11(1) and 22 (3) (a) of the Act ibid.

The Statutory Inspection as on March 31, 2012 revealed that the bank was not complying with the provisions of Section 11(1) and 22 (23) (a)  of the Act. It had  a negative CRAR of 753.77%, assessed net worth of  (-) 689.84 Lakh, accumulated loss of  `880.35 Lakh and deposit erosion had reached the alarming level of 42.14%.

The second SCN dated December 14, 2012 was issued to the bank for cancellation of banking licence   issued to the bank. The bank in its reply admitted to the erosion in deposits and reiterated its  proposal for infusion  of capital without  filing FIR against persons  responsible for the frauds.

From the facts and circumstances stated above it is observed that:

  1. The bank does not comply with the provisions of Sections 11(1), 18 and 24 of BR   Act.

  2. The bank is not in a position to pay its present and future depositors and as such, does not comply with Section 22(3) (a) of the Act.

  3. The affairs of the bank were and are being conducted in a manner detrimental to the interests of the depositors which implies non compliance with Section 22(3) (b) of the Act.

  4. The financial position of the bank leaves little scope for its revival.

  5. Public interest would be adversely affected if the bank is allowed to carry on its business any further.

In view of the above the licence granted to the bank to conduct banking business deserved to be cancelled. Accordingly, the licence dated March 2, 1998 granted to the Vaishali Urban Co-operative Bank Ltd., Jaipur, Rajashan to conduct banking business in India under Section 22 of the Act  has been cancelled. With the cancellation of licence and commencement of liquidation  proceedings, the  process of paying the depositors of  the Vaishali Urban Co-operative Bank  Ltd., Jaipur, Rajasthan  will be set in motion subject to the terms and  conditions of the Deposit Insurance Scheme.

Consequent to the cancellation of its licence,  The Vaishali Urban Co-operative Bank Ltd., Jaipur, Rajasthan is prohibited from carrying on ‘banking business’ as defined in  Section 5(b)  of Banking Regulation Act, 1949 (AACS)  including acceptance and repayment of deposits.

For any clarifications, depositors may approach Shri V.R.  Praveen Kumar , Deputy General Manager, Urban Banks Department, Reserve Bank of India, Jaipur. His contact details are as below.

Postal Address: Urban Banks Department, Reserve Bank of India, Jaipur Regional Office, Rambagh Circle, Tonk Road, P.B.No-12, Jaipur-302 052, P.No-0141 2560543, Fax No.–0141 2569693; Email.

Sucheta Vazkar
Manager

Press Release : 2012-2013/2132

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Web Application Development Web based Software Solution Web Application Deployment Web Application Solutions Web Application Software Development Web Application Deployment Web Application Programming Web Application Design and Development

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions