RBI cancels license of Madhavpura Mercantile Co-operative Bank

RBI cancels license of Madhavpura Mercantile Co-operative Bank

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Asia Bizz: The license of the Ahmedabad-based Madhavpura Mercantile Co-operative Bank has been cancelled by the Researve Bank Of India (RBI) on June 7, 2012. In the year 2000, the bank was in news for the exposure of the stock broker Ketan Parekh for his involvement in scam.

The RBI in a press release said, “In view of the fact that the bank had ceased to be solvent, all efforts to revive it in close consultation with the Union Government had failed and the depositors were being inconvenienced by continued uncertainty, the RBI passed an order cancelling the banking licence issued to the co-operative bank with effect from the close of business on June 4”. An order to wind up the cooperative bank and to appoint a liquidator has been requested to the Central Registrar of Co-operative Societies (CRCS), New Delhi.

The license to the co-operative bank was issued by the RBI on August 19, 1994 to commence banking business in India. Even the government was advised of the position that there was no other option than to initiate the process of liquidation of the bank.

The bank was involved in a fraud amounting Rs. 1,200 crore committed by the share broking community which included Ketan Parekh and his associates.