The Reserve Bank of India (RBI) has cancelled the licence of The Ahmedabad Mahila Nagarik Sahakari Bank (AMNSB) under Section 22 of the Banking Regulation Act, 1949 (as applicable to cooperative societies).
An RBI official, speaking on condition of anonymity, said: "The bank's licence dated July 12, 1984 has been cancelled vide our order dated January 18, 2002 because it had become unoperational and it has not been transacting any business for the last six months because of its absolutely weak financial position and mismanagement."
Emphasising that AMNSB was already declared a weak bank by RBI more than two years back, he said: "Its board of directors had voluntarily tendered their resignation around six months back. And immediately thereafter, the Gujarat registrar of cooperative societies (RCS) had appointed a custodian to take charge of the bank's day-to-day affairs."
But as the custodian found it difficult to honour any of the bank's commitments or clear up its liabilities because of lack of funds, a decision was then taken to down its shutters. Following that RBI has now cancelled its licence, he elaborated.
Therefore, now AMNSB is precluded from transacting the business of banking as defined in Section 5 (b) and (c), Section 7 and Section 49A of the Act. Among other things, it cannot accept deposits from the public nor allow withdrawals by cheque, draft, order or otherwise, he added.