Reserve Bank of India has suspended the license of Asia’s oldest Cooperative bank: Anyonya Co-operative Bank Limited (ACBL) Vadodara(Gujarat) for six months after examining all options for their revival. RBI has also ordered to stop all transactions.
The Reserve Bank of India ordered the bank to stop most of its operations under Section 35A of the Banking Regulation Act, on September 14, 2007, and ABCL closed in March 2008. Its annual general meeting in September 2008 formed a committee to re-open the bank.
The fate of the bank has been uncertain after the Reserve Bank of India (RBI) clamped restrictions on it for failing to reduce its non-performing assets (NPAs). Revival, merger and liquidation have all been discussed for the bank, but nothing worked. Due to liquidity problems and high NPAs, the bank has been placed under directions under Section 35A of the Banking Regulation Act 1949 (As Applicable to Cooperative Societies) order 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 after seeking an appointment. The PM had said that he would take up the matter with the RBI and help us out. Shukla had also raised the issue in Parliament on March 4 and said that the institute should be granted a heritage status.
ACBL was established in 1889 by Vitthalrao Kavthekar under the guidance of Lokmanya Tilak with the name Anyonya Sahayakari Mandali Co-operative Bank Limited, with a primary objective of providing an alternative to exploitation by moneylenders for Baroda’s residents. When it was started in 1889 it had just 23 members and 76 Indian rupees (Rs) of capital, which grew to Rs 873 in the first year. By 2006, it had grown up to more than 23,000 share holders and more than ten branches which are mainly located within Baroda city and some small towns surrounding it. Its administration is governed by a group of nine board directors, three of whom are elected every year for a three year term.