Indore/Mumbai: The Reserve Bank of India has cancelled the licence of Indore based Maharashtra Brahmin Sahakari Bank for alleged financial irregularities and Madhya Pradesh registrar of cooperatives would appoint a liquidator to initiate liquidation proceedings.

"The Central Bank has cancelled the banking licence of the coop bank due to financial irregularities and problems and further process of liquidation would be initiated by the registrar," RBI officials said in Mumbai.

The RBI team, examining the bank's record since yesterday (Oct 6, 2004), sealed the bank this morning after it found that the bank had disbursed loan above limits and misused its reserve fund, Bank sources said.

The Central Bank has also taken steps to seal other branches of the bank in the city, sources said.

The bank directors had raised the Non Performing Asset (NPA) limit from five to 78 per cent against the norms, disbursed loans to the near and dear ones of the directors and non-repayment of loans resulting in loss of Rs 25.78 crore among others.

The 10,000 member bank had posted Rs 213.43 lakh loss in 2002, Rs 1695.29 loss in 2003 and Rs 679.02 loss in last fiscal, according to RBI notice to the bank.

Bank Chairman Yeshwant Dabeer was not available for comment.