The Registrar of Co-operative Societies, Odisha has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank.
The bank was granted a licence by RBI on October 21, 2009. The latest statutory inspection of the bank conducted in March, 2013, revealed that the bank is in deep red and any chance of its revival is next to impossible.
The net loss of the bank was assessed at Rs 2267.21 lakh during 2012-2013. In view of the large amount of NPAs, substantial accumulated losses, poor chances of recovery for improvement in financial health of the bank, revival prospects of the bank in the near future are bleak.
The bank had taken large amount from unrealized interest on NPA accounts to operating income since long and was overstating its profit. The loans and advances outstanding against the ex-directors are also huge.
In the press note RBI says, “it took the extreme measure of cancelling the licence of the bank in the interest of bank’s depositors. With the cancellation of licence and commencement of liquidation proceedings, the process of paying the depositors of The Baripada Urban Co-operative Bank Ltd., Baripada (Odisha) the amount insured as per the DICGC Act, will be set in motion subject to the terms and conditions of the Deposit Insurance Scheme.