RBI cancels Adoor Co-operative Urban Bank’s banking licence, allows to operate as NBFC | Mint
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Business News/ Industry / Banking/  RBI cancels Adoor Co-operative Urban Bank’s banking licence, allows to operate as NBFC
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RBI cancels Adoor Co-operative Urban Bank’s banking licence, allows to operate as NBFC

The Adoor Co-operative Urban Bank will ensure to repay unpaid and unclaimed deposits of non-members held by it, whenever demanded, even after being notified as non-banking institution, the RBI said

On Monday, the RBI imposed penalties on four cooperative banksPremium
On Monday, the RBI imposed penalties on four cooperative banks

The Reserve Bank of India (RBI) on Tuesday directed Kerala-based Adoor Co-operative Urban Bank to function only as a non-banking institution.

Accordingly, the RBI cancelled the banking licence dated January 03, 1987 granted to the The Adoor Co-operative Urban Bank, the banking regulator said. The cancellation of licence is with effect from the close of business on April 24, 2023, the central bank said in a release.

“This makes it obligatory on the part of The Adoor Co-operative Urban Bank Ltd, Adoor to stop conducting the business of banking... including acceptance of deposits from non-members with immediate effect," the Reserve Bank added.

The central bank further said, The Adoor Co-operative Urban Bank will ensure to repay unpaid and unclaimed deposits of non-members held by it, whenever demanded, even after being notified as non-banking Institution.

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

On Monday, the RBI imposed penalties on four cooperative banks—Bombay Mercantile Co-operative Bank, Tamil Nadu State Apex Co-operative Bank, Janata Sahakari Bank and Baran Nagrik Sahkari Bank—for contravention of various norms.

The central bank had imposed a monetary penalty of 13 lakh on Bombay Mercantile Co-operative Bank for contravention of the provisions of Banking Regulation Act, 1949. The bank failed to transfer eligible amount to Depositor and Education and Awareness Fund (DEAF) within the prescribed period.

Similarly, the RBI imposed a penalty of 13 lakh on Janata Sahakari Bank for non-compliance with directions on 'Interest Rate on Deposits'. And a penalty of 16 lakhs on The Tamil Nadu State Apex Co-operative Bank for non-compliance with the directions issued by the NABARD on “Review of Frauds - Guidelines on Monitoring and Reporting System". 

A monetary penalty of 2 lakh has been imposed on Baran Nagrik Sahkari Bank, Baran, Rajasthan for contravention of certain norms. The bank was not in compliance with RBI directions prohibiting grant of loans/advances/any other financial accommodation to relatives of its directors and not reporting the same in OSS-6 return to RBI.

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Published: 25 Apr 2023, 09:01 PM IST
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