RBI cancels Mahalaxmi Cooperative Financial institution Dharwad’s banking licence, permits to function as NBFC

The Reserve Financial institution of India (RBI) on Tuesday directed Karnataka-based Mahalaxmi Cooperative Financial institution, Dharwad to perform solely as a non-banking establishment.

Accordingly, the RBI cancelled the banking licence dated March 23, 1994 granted to the Mahalaxmi Cooperative Financial institution Dharwad, the banking regulator stated. The cancellation of licence is with impact from the shut of enterprise on June 27, 2023, the central financial institution stated in a launch.

“This makes it compulsory on the a part of Mahalaxmi Cooperative Financial institution Ltd., Dharwad, Karnataka to cease conducting the enterprise of ‘banking’ throughout the which means of part 5(b) of the Act ibid, together with acceptance of deposits from non-members with quick impact,” the Reserve Financial institution added.

The central financial institution additional stated, Mahalaxmi Cooperative Financial institution Ltd., Dharwad, Karnataka will guarantee to repay unpaid and unclaimed deposits of non-members held by it, every time demanded, even after being notified as non-banking Establishment.

In April 2023, the central financial institution cancelled the banking licence of Adoor Co-operative City Financial institution and allowed it to function solely as NBFC.

The crisis-ridden cooperative banks proceed to face the wrath of the RBI, which cancelled the licence of 9 lenders in FY 2023.

On Monday, the RBI imposed penalties on seven cooperative banks for contravention of/non-adherence with the sure norms issued by the central financial institution for a similar.

These cooperative banks have been —Textile Merchants Co-operative Financial institution Ltd, Ujjain Nagarik Sahakari Financial institution Maryadit, Panihati Co-operative Financial institution, The Berhampur Co-operative City Financial institution, Solapur Siddheshwar Sahakari Financial institution, Uttar Pradesh Co-operative Financial institution Restricted and the Uttarpara Co-operative Financial institution, the central financial institution stated in statements. 

The central financial institution had imposed a penalty of 28 lakhs on Uttar Pradesh Co-operative Financial institution Restricted. A financial penalty of 4.50 lakhs was imposed on Textile Merchants Co-operative Financial institution Ltd. Additional, the central financial institution imposed 2.50 lakh penalty every on Panihati Co-operative Financial institution and The Uttarpara Co-operative Financial institution. Solapur Siddheshwar Sahakari Financial institution  confronted a penalty of 1.50 lakh. Equally, 1 lakh every penalty was imposed on Ujjain Nagarik Sahakari Financial institution Maryadit and The Berhampur Co-operative City Financial institution.

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Up to date: 27 Jun 2023, 07:32 PM IST