Karnataka: RBI Revokes Banking License of Mahalaxmi Cooperative Bank in Dharwad

Dharwad, 28th June 2023: In a significant development, the Reserve Bank of India (RBI) has announced the cancellation of the banking license granted to Mahalaxmi Cooperative Bank Ltd. in Dharwad, Karnataka. The decision comes under Section 36A(2) in conjunction with Section 56 of the Banking Regulation Act, 1949. The license, originally issued on March 23, 1994, permitting the bank to conduct banking operations in India under Section 22 of the aforementioned Act, has been revoked effectively as of the close of business on June 27, 2023.

Consequently, Mahalaxmi Cooperative Bank Ltd. is now classified as a non-banking institution, as recognized by the RBI. This classification requires the bank to discontinue all activities related to “banking” as defined in section 5(b) of the Act, including the acceptance of deposits from non-members, with immediate effect.

The regulatory directive also imposes an obligation on Mahalaxmi Cooperative Bank Ltd., Dharwad, Karnataka to fulfill repayment of unpaid and unclaimed deposits belonging to non-members, upon request, even after the bank’s transition to a non-banking institution.