SC culls Apex Co-op revival plea

A review petition filed by the Apex Urban Co-operative Bank of Maharashtra and Goa against cancellation of its banking licence has been turned down by the Supreme Court (SC).

The Reserve Bank of India (RBI) had cancelled Apex Bank's license on Supreme Court's directive on October 30, 2003.

A special bench of the apex court delivered its judgment on the Apex Bank's review petition on January 14.

The Supreme Court, on October 29, had upheld the Maharashtra State Co-operative Bank's contention that unless a co-operative society is a state co-operative bank or a central co-operative bank or a primary co-operative bank (as defined under the Nabard Act), no licence can be issued. The Mumbai-headquartered Apex Bank is registered under the Multi State Co-operative Act, 1984.

"Our licence has been cancelled on technical grounds. We've moved the Union government (under Section 22 of the Banking Regulation Act) for reviving our operations," K Raj Kumar, general manager, Apex Bank, said.

Kumar averred that the bank had an extremely smooth operations and was financially sound.

"We are committed to the 209 member banks, who collectively have placed deposits aggregating Rs 687 crore with us.

Our advances amount to Rs 228 crore. In the event our revival as a bank is not possible, we will function as a multi-state co-operative society."

A break-up of the advances shows that the bank has advanced Rs 85 crore against fixed deposits; Rs 100 crore to sugar units; and the balance to others.