Asia's oldest co-operative bank closes

The Reserve Bank of India has finally cancelled the licence of Asia's oldest co-operative bank, Vadodara-based Anyonya Co-operative Bank Limited (ACBL), after examining all options for its revival.

RBI sources here said the bank had been ordered to stop all its transactions under Section 35A of the Banking Regulation Act, on September 14, 2007, and the bank downed its shutters in March, 2008. Its annual general meeting in September, 2008 formed a committee to find ways to re-open the bank.

The fate of the bank had been uncertain ever since the RBI clamped restrictions on it for failing to reduce its non-performing assets (NPAs). Revival, merger and liquidation were all discussed for the bank, but nothing worked.

Due to liquidity problems and high NPAs, the bank was placed under directions under Section 35A of the Banking Regulation Act 1949, placing a ceiling on repayment of deposits per depositor.

In a desperate bid to make the bank survive, Vadodara mayor and MP Balkrishna Shukla, along with ACBL chairman Dilip Kelkar and director Vrushal Revadandekar had met Prime Minister Manmohan Singh in March, 2010. Singh had said that he would take up the matter with the RBI. Shukla had also raised the issue in Parliament on March 4 and said that the institute should be granted a heritage status.