The Registrar of Co-operative Societies, Maharashtra has also been requested to issue an order by RBI for winding up the Premier Automobiles’ Employees Co-operative Bank and appoint a liquidator for the bank.
RBI had earlier advised the bank to explore the possibility of merger with another bank. However, the bank did not take any action in this regard.
The RBI inspection revealed various deficiencies and irregularities in the working of Bank and it restricted it from opening ATMs/ extension counters/ branches and extending the area of operation, declaration of dividend without permission of the Bank and acquiring or shifting its office premises.
RBI also found out that the bank had given loans to several persons who were not employees of Premier Automobiles Ltd.
It also noted that the performance of the committees of the Board was not satisfactory. The bank had violated RBI guidelines on induction of professional directors on the Board of the bank.
The deterioration in bank’s financial position showed the inability of the management to bring about any major improvement and arrest the deteriorating financial position of the bank. The performance of the Board of the bank was not satisfactory as it could not take initiative in framing risk management policies of the bank.