The Reserve Bank of India (RBI) has cancelled the licenses for many Co-operative banks for the year ended 31 March 2023 and also prohibited all the transactions in those banks.
Severe fines were imposed on the banks along with the cancellation of their licenses. People having accounts in those banks should not miss out the update regarding the cancellation of their license and the huge actions that were taken by the Central bank of the country. The Co-operative banks have faced the huge difficulty because of the strict actions taken by the Reserve Bank of India (RBI).
The licenses were cancelled for 8 co-operative banks in the previous financial year. RBI has imposed a huge penalty on Co-operative banks which is 100 times more than the usual penalty which were followed by the RBI. With the involvement of Co-operative banks in the rural areas, the banking sector has reached out to rural people rapidly and expanded within a short span. The Reserve Bank of India has taken extreme steps against the Co-operative banks due to the deviations that were committed in these banks.
The indulgence of political leaders started increasing in the Co-operative banks apart from the weak finance and the dual regulation, which was one of the reasons behind the cancellation of the license.
The Central bank somehow found out that these particular banks are going against the rules and regulations of RBI.They cracked the information that few Co-operative banks are not adhering according to the RBI norms. So, the mother bank has cancelled the license for eight Co-operative banks in the year 2022-23.
Mudhol Co-operative Bank, Rupee Co-operative Bank, Milath Co-operative Bank, Shri Anand Co-operative Bank, Deccan Urban Co-operative Bank, Lakshmi Co-operative Bank, Babaji Date Mahila Urban Bank and Sewa Vikas Co-Operative Bank are the eight Co-operative banks whose licenses were cancelled by the Reserve Bank of India and also harsh steps were taken against these banks by imposing a huge penalty.
Earlier, the license was approved for the above eight banks by the RBI, in spite of insufficient capital and non-compliance of banking regulations,But now the licenses were cancelled because of insufficient earning potential of these banks in the future period.
The RBI has been monitoring all the Co-operative banks in India for many years and has cancelled the license for 12 Co-operative banks in the Financial year 2021-22, around 3 banks licenses were taken back by the RBI in the FY 2020-2021 and 2 Co-operative banks licenses were cancelled in 2019-20.
