If you have a bank account with a cooperative bank, you must read this news. The Reserve Bank (RBI) has punished banks for the past few years severely.
As a result, the RBI even canceled the licenses of many banks. A few large banks have also received substantial fines from the central bank. Cooperative banks will be most negatively impacted by the Reserve Bank's decision.
Reserve Bank also imposed penalties 114 times.
Eight cooperative banks' licenses for the March 31-expiring fiscal year 2022–23 have been withdrawn by the RBI. The RBI has fined these banks 114 times for violating the rules. We'd like to let you know that the expansion of cooperative banks has greatly improved the accessibility of financial services in rural areas. But the RBI was compelled to move quickly as a result of the irregularities found in these banks.
Allegations of negligence in rules.
Cooperative banks frequently suffer from interference from local governments in addition to dual regulation and weak financial conditions. The Reserve Bank has consequently started prosecuting cooperative banks that contravene the law. Eight banks' licenses have had theirs canceled in the previous year. Let's check the banks whose licenses the RBI has canceled.
Licenses of these banks were canceled.
1. Mudhol Cooperative Bank
2. Milath Cooperative Bank
3. Shree Anand Cooperative Bank
4. Rupee Cooperative Bank
5. Deccan Urban Cooperative Bank
6. Laxmi Cooperative Bank
7. Sewa Vikas Co-operative Bank
8. Babaji Date Mahila Urban Bank
The RBI terminated the licenses of the aforementioned banks as a result of insufficient capital and violations of the Banking Regulation Act. Also canceled due to factors like a lack of hope for a bright financial future. The RBI has been keeping an eye on the cooperative banking sector for some years now. The central bank terminated the licenses of 12 cooperative banks in 2021–2022, three cooperative banks in 2020–2020, and two cooperative banks in 2019–2020, respectively.