The Reserve Bank of India (RBI) made a significant announcement on June 27, revoking the banking permit of Mahalaxmi Cooperative Bank Ltd in Dharwad, Karnataka. However, in a subsequent move, the RBI granted the institution a non-banking institution license, allowing it to continue its operations.
License Cancellation Effective from June 27
Effective immediately on June 27, the RBI officially canceled the banking license granted to Mahalaxmi Cooperative Bank Ltd, which had been in effect since March 23, 1994. This decision does not hinder the bank’s ability to engage in the business of banking and accept deposits from non-members.
Focus Shifted to Non-Banking Operations
Following the cancellation of its banking permit, Mahalaxmi Cooperative Bank Ltd will now function as a non-banking institution. This transition allows the bank to continue providing banking services while adhering to the regulations and guidelines applicable to non-banking entities.
Repayment of Unclaimed Deposits
Despite its new non-banking status, Mahalaxmi Cooperative Bank Ltd is obligated to repay any unpaid or unclaimed deposits held by non-members upon request. The bank must ensure the prompt return of these funds, even after being reclassified as a non-banking institution.
Business Continuity Unaffected
With the granting of a non-banking institution license, Mahalaxmi Cooperative Bank Ltd can operate seamlessly and serve its customers without disruption. The transition to the non-banking sector enables the bank to continue its financial activities, contributing to the stability of the local banking landscape in Dharwad, Karnataka.