RBI Cancels license of The Mahalaxmi Cooperative Urban Bank Ltd., Hyderabad, Andhra Pradesh
Case Brief
The Reserve Bank of India has cancelled the licence of The Mahalaxmi Cooperative Urban Bank Ltd., Hyderabad, Andhra Pradesh, under Section 22 of the Banking Regulation Act, 1949 (as applicable to co-operative societies). As a result, the bank is precluded from transacting banking business and cannot accept deposits from the public or allow withdrawals by cheque, draft, order or otherwise.
The Reserve Bank of India cancelled the licence of The Mahalaxmi Cooperative Urban Bank Ltd., Hyderabad, to carry on banking business. The order states that the bank is precluded from transacting the business of banking as defined in the Banking Regulation Act, 1949 (as applicable to co-operative societies), including accepting deposits from the public and allowing withdrawals by cheque, draft, order or otherwise. The cancellation was made under Section 22 of the Act.
Severity Assessment
Licence cancellation is a complete prohibition on operating as a bank, which falls under severity 5.
The bank must stop carrying on banking business immediately. Depositors and other customers will not be able to place new deposits or withdraw funds through normal banking instruments as described in the release.
Published as The Mahalaxmi Cooperative Urban Bank Ltd.
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