• The Board has not made any concerted effort to improve the bank’s financial position and bring it out of the weak status.

Thus, in an order dated February 25, 2003, the RBI’s Executive Director P B Mathur signed a license revocation order in which he stated: “Having regard to all the facts, the Reserve Bank of India is satisfied that allowing the bank to carry on banking business any further would be detrimental to the interest of the present and future depositors and hence the license granted to the Pratibha Mahila Sahakari Bank Ltd is hereby cancelled.”

“The RBI is of the view that no purpose will be served by granting any further time to the bank to revive its position. Public interest would be adversely affected if the bank is allowed to carry on its business further,” the RBI report said.

The RBI’s inspection report was highly critical of the bank’s loan granting policy without proper securities (“the bank had no loan policy” the credit appraisal system of the bank contained many deficiencies”) and also took up the issue of waiver of interest on NPA loans to Pratibha Patil’s relatives in a separate section titled “complaints and frauds”.

The RBI listed the waiver of loans to two of Patil’s nieces and her sister-in-law and noted, “it was observed that the above accounts were closed by the bank by waiving the penal interest and charging interest @ 13%. The bank had not taken approval of the members in the Annual General Meeting.”

... contd.