RBI: Mahalaxmi Cooperative Bank, situated in Karnataka, has had its banking licence revoked by the Reserve Bank of India (RBI). As of right now, this bank will only operate similarly to an NBFC. The central bank announced that this was effective as of June 27, 2023, at the close of business. The Mahalaxmi Co-operative Bank Limited will continue to operate as a non-banking institution, according to the Reserve Bank. Describe how Mahalaxmi Cooperative Bank received its licence from the Reserve Bank on March 23, 1994.
RBI’s Crackdown on Cooperative Banks
In the past, the Central Reserve Bank has become stricter with cooperative banks. For instance, the Adoor Co-operative Urban was only permitted to conduct business as an NBFC when the national Reserve Bank revoked its banking licence in April 2023. In addition, nine lenders’ licences have been revoked for the fiscal year 2023. The Reserve Bank fined seven cooperative banks earlier on Monday for breaking or failing to follow certain rules. These cooperative banks were Textile Traders Co-operative Bank Limited, Uttar Pradesh Co-operative Bank Limited, Uttarpara Co-operative Bank, The Berhampur Co-operative Urban Bank, Ujjain Nagrik Sahakari Bank Maryadit, Panihati Co-operative Bank, and Solapur Siddheshwar Sahakari Bank.
Uttar Pradesh Co-operative Bank Hit with Rs 28 Lakh Penalty
The Uttar Pradesh Co-operative Bank Ltd. had been fined Rs 28 lakh by the national bank. Textile Traders Co-operative Bank Ltd. was penalised 4.50 lakh rupees. In addition, the central bank fined Panihati Cooperative Bank and Uttarpara Cooperative Bank 2.50 lakh apiece. Solapur Siddheshwar Sahakari Bank received a punishment of Rs. 1.50 lakh, while Ujjain Nagrik Sahakari Bank Maryadit and The Berhampur Sahakari Urban Bank each received a fine of Rs. 1 Lakhs.
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