Reserve Bank cancels the licence of The Srikakulam Co-operative Urban Bank Ltd., Srikakulam – Andhra Pradesh

In view of the fact that The Srikakulam Co-operative Urban Bank Ltd., Srikakulam (Andhra Pradesh) had ceased to be solvent, all efforts to revive it had failed and the depositors were being inconvenienced by continued uncertainty, the Reserve Bank of India delivered the order, canceling its licence, dated August 23, 2013 to the bank on August 27, 2013.

On liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of Rs1,00,000/- (Rupees one lakh only) from the Deposit Insurance and Credit Guarantee Corporation (DICGC) under usual terms and conditions.

The bank was set up in 1995, and by 2006 it was in a bad shape.

The bank also defaulted in SLR maintenance thereby violating Section 24 of the Act. The Board did not take timely action against the M. D who committed fraud.

The highlights of the RBI findings are:

The bank does not comply with the provisions of sections 11(1), 18, 22(3) (a), 22 (3) (b), 24, 29 and 31 of the Act.
The bank is not in a position to pay its present and future depositors in full as and when their claims accrue;
The affairs of the bank are being conducted in a manner detrimental to the interests of depositors.
The financial position of the bank is so precarious that there is no scope for its revival; and
Public interest will be affected if the bank is allowed to carry on its business any further.

Srikakulam town has an ancient history, with old-timers believing that Srikakulam town was founded by Lord Balarama, the brother of Lord Krishna.

The famous Sun-God Temple is also situated with in the Municipal limits of Srikakulam town, it is one of the ancient and very few Sun-God temples in our country. The archeological experts say that the stone inscription available in the temple show that the rules of Kalinga Kingdom Devendra Varma must have built this temple in the later half of the 7th Century A.D