Reserve Bank of India Monday canceled license to the Gujarat Industrial Co-operative Bank (GICB) because it has ceased to be solvent.

RBI delivered the order canceling the authorization to the bank on November 11, after all efforts to revive it, in consultation with the Government of Gujarat had failed.

Central register of cooperative societies have been invited to give an order of arrest urban cooperative bank and appoint a liquidator, the official statement said today.

In the event of liquidation, all depositors of the bank is entitled to reimbursement of deposits to a monetary ceiling of Rs one lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC), he said.

The stimulus package introduced by the Bank in 2010 was considered but was found not to be viable because it was not in accordance with the guidelines of RBI States.

The proposed merger of Saraswat Bank, Mumbai did not materialize, he said.

The inspection of the bank by the RBI March 31, 2010 showed that its financial health is deteriorating. The bank’s equity capital and risk weighted assets (RAC), the ratio used to protect depositors and stability, had been negative.

Equity CRAR of the bank and went and had a negative (-) Rs29, 184.18 lakh and (-) 365 per cent respectively during the audit, 31 March 2010, the statement said.

The estimated net loss of the bank was on the RS3, 963 lakh against loss reported net of RS3, 872.93 lakh.

Gross and net non-performing assets (NPA) accounted for 85.4 and 21.3 percent of gross income and net, respectively.

Criminal complaint was filed against the administrator of the failure of the bank manager and former government commission leads to huge losses for the bank, the statement said.

The RBI has issued several opinions as a justification for the bank to ask why the license granted by the September 29, 1999, for banking should not be canceled.

The Bank has submitted its response that was not satisfactory, then RBI reversed its banking license.