Recorded RBI impact
Lifted
Action lifted · Lifted / withdrawn
Published by RBI
26 Nov 2021
Case Brief
The Reserve Bank of India cancelled the licence of Shivalik Mercantile Co-operative Bank Ltd. because it transitioned to a Small Finance Bank under RBI’s voluntary transition scheme for urban co-operative banks. The release notes that the institution ceased to be a co-operative bank under the Banking Regulation Act, 1949, and that the provisions applicable to the co-operative bank no longer apply. Separately, Shivalik Small Finance Bank Ltd. was granted a fresh licence dated January 1, 2021 to carry on small finance banking business in India.
Why RBI Acted
RBI cancelled the licence of Shivalik Mercantile Co-operative Bank Ltd. upon its transition to Small Finance Bank under the Scheme of Voluntary Transition of Primary (Urban) Co-operative Banks into Small Finance Banks. The release states that, on transition, the entity ceased to be a co-operative bank under the Banking Regulation Act, 1949, and the provisions applicable to the co-operative bank ceased to apply.
Operating Impact
The co-operative bank licence no longer applies to Shivalik Mercantile Co-operative Bank Ltd., and the entity continues as Shivalik Small Finance Bank Ltd. under the new licence. The forward-looking effect is a regulatory transition rather than a punitive restriction; customers and counterparties deal with the newly licensed small finance bank entity.
Regulatory Basis
- Section 5 (cci) of the Banking Regulation Act, 1949
- Section 56 of the Act
- section 22 (1) of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Lifted
- Order Date
- 1 Jan 2021
- Effective From
- 1 Jan 2021
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank