The Reserve Bank of India (RBI) has granted non-banking institution licence to Karnataka-based Mahalaxmi Cooperative Bank, Dharwad, after cancelling its banking permit.

Accordingly, the RBI has cancelled the banking licence dated March 23, 1994, granted to Mahalaxmi Cooperative Bank, Dharwad, the regulator said.

The cancellation is with effect from the close of business on June 27, the central bank said in a release.

“This makes it obligatory on the part of Mahalaxmi Cooperative Bank Ltd., Dharwad, Karnataka to stop conducting the business of ‘banking’ within the meaning of section 5(b) of the Act ibid, including acceptance of deposits from non-members with immediate effect," the Reserve Bank added.

Further, the bank shall ensure to repay unpaid and unclaimed deposits of non-members held by it, whenever demanded, even after being notified as a non-banking institution.

In April 2023, the central bank cancelled the banking licence of Adoor Co-operative Urban Bank and allowed it to operate only as NBFC.

In FY 2023, the RBI cancelled the licence of nine lenders.  

On Monday, the RBI imposed penalties on seven cooperative banks for contravention of/non-adherence with the certain norms issued by the central bank.

These cooperative banks were Textile Traders Co-operative Bank; Ujjain Nagarik Sahakari Bank Maryadit; Panihati Co-operative Bank; The Berhampur Co-operative Urban Bank; Solapur Siddheshwar Sahakari Bank; Uttar Pradesh Co-operative Bank; and Uttarpara Co-operative Bank.