Licence of the Chatrapur Co-operative Bank Ltd., Chatrapur, cancelled. Chatrapur – Alan Turing was conceived here!!!!!

One more cooperative bank has been laid to rest, with Reserve Bank of India, cancelling the licence of ‘The Chatrapur Co-operative Bank Ltd., Chatrapur, Odisha’.

Reserve Bank of India delivered the Order to the bank cancelling its licence after the close of business on May 23, 2012.

RBI had to take the extreme step of cancelling the Bank’s licence after all efforts to revive it failed and also not to further inconvenience the Co-operative Bank’s depositors by the continued uncertainty.

The Registrar of Co-operative Societies, Government of Odisha has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank.

As is usual on liquidation, every depositor will be repaid of his/her deposits up to a monetary ceiling of Rs 1,00,000/- (Rupees One lakh only) from the Deposit Insurance and Credit Guarantee Corporation (DICGC) under usual terms and conditions.

Chhatrapur (also spelt as Chatrapur) is a town and a notified area committee in Ganjam District in the state of Odisha, India. It is the headquarter town of Ganjam District.

Computer enthusiasts will be delighted to know that ‘Alan Turing’, the father of modern computer science was conceived in Chhatrapur, Odisha in 1912. 

Brief history of COOP BANK.

It was initially registered as co-operative society on May25,1915.

On march21,1984 it was granted a licence to carry on banking business under Section 22 of the Banking Regulation Act, 1949 AACS (As Applicable to Co-operative Societies)

The first signs of trouble were notice at the time of the Statutory inspection with reference to its financial position as on March 31, 2003. The Bank was advised by RBI not to accept fresh deposits and also not grant fresh loans/advances.

The statutory inspection of the bank with reference to March 31, 2007 had revealed that the bank had violated RBI’s direction by accepting fresh deposits and hence all inclusive direction under Section 35 A of the Act incorporating therein all the operational instructions and in addition a ceiling on withdrawal of deposits of Rs.500/- per depositor were imposed on August 30, 2007.

The subsequent statutory inspection of the bank with respect to its position as on March 31, 2010 revealed that its financial position had further deteriorated and was precarious.

A Show Cause Notice (SCN) dated September 24, 2010 was therefore issued to the bank for cancellation of licence. The bank’s reply to the SCN was not satisfactory.

The latest inspection carried out with reference to the bank’s financial position as on March 31, 2011 revealed that there was no improvement in the banks financials.

The bank failed to maintain the required CRR and SLR during the period under review and thus it also did not comply with the provisions of Section 18 and 24 of the Act. The bank had violated RBI’s directions issued under Section 35 (A) of the Act by way of setting off of loan amount with FDs and also allowing refund of share capital in cash to share holders. The bank continued to have liquidity problem and could not even allow withdrawal of amount sanctioned under hardship cases.

The bank was issued a fresh SCN as to why the licence granted to it to carry on banking business under Section 22 of the Act should not be cancelled and the bank taken into liquidation. The bank submitted its reply. The reply to the SCN was examined, considered and was found unsatisfactory.

Having regard to all the above facts, the Reserve Bank was satisfied that allowing the bank to carry on banking business any further, would be detrimental to the interest of the present and future depositors. Hence, the licence granted to the bank to conduct banking business deserved to be cancelled.

With the cancellation of its licence and commencement of liquidation proceedings, the process of paying the depositors of the Chatrapur Co-operative Bank Ltd., Odisha will be set in motion subject to the terms and conditions of the Deposit Insurance Scheme.

Chatrapur is a city in the State of Odisha. The closest tourism destination to Chatrapur is Gopalpur. Other close by tourism destinations includes Berhampur, Ichapuram and Chilika. The nearest major railway station to Chatrapur is Berhampur (8kms). The nearest airport is at Bhubaneshwar (133kms)

IRE (OSCOM) which is a public sector undertaking under the Dept. of Atomic Energy is situated near Chatrapur which beneficiates different minerals from the beachsands of the Bay of Bengal. Different products such as zircon, ilmenite, sillimanite, Rutile are extracted. It also houses a thorium extraction plant. There is a huge chain of cashewnut factories situated in or near Chatrapur. 

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s