Bom HC | Cancellation of CKP Co-operative Bank’s license is in depositors interest; Interim relief refused

Bombay High Court: A Division Bench of Nitin Jamdar and S.P. Tavade, JJ., held that Reserve Bank of India’s decision to cancel the banking license of CKP Co-operative Bank Limited is not to be interfered with.

Present petitions were filed challenging the respondents’ — Reserve Bank of India action wherein the banking licence of CKP Co-operative Bank Limited was cancelled.

Bench on considering the facts and circumstances of the present matter noted that before the licence of the bank was cancelled, it was preceded by various notices and inspections by the Reserve Bank of India.

Reserve Bank of India has the power of superintendence over the Banks in the country in the interest of the banking policy. Various powers are available to the Reserve Bank of India under the Banking Regulations Act, 1949.

It has been noted that financial position of the bank deteriorated from time to time and RBI found that affairs of the bank were conducted detrimental to the interest of the depositors and public. In the said background, RBI formed and opinion that the impugned order had to be passed.

Bench stated that,

“..scope of interference of writ courts in such decisions of the Reserve Bank of India is extremely narrow.”

Court held that, steps taken by RBI were for the benefit of depositors. RBI is entrusted with powers to take necessary steps in the interest of depositors, banks and public.

Thus, prima facie there was no fundamental error to be found and in view of the said interim relief was refused by the bank. [Vishwas Utagi v. State of Maharashtra, 2020 SCC OnLine Bom 725,  decided on 19-06-2020]

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