Adoor Co-operative Urban Bank's Banking License Revoked By RBI, Permitted To Operate As Non-Banking Entity

Reserve Bank of India (RBI) has declared the Adoor Co-operative Urban Bank Ltd, Adoor, Kerala as a non-banking Institution.

The Reserve Bank of India (RBI) has announced the revocation of the banking license issued on January 3, 1987 to The Adoor Co-operative Urban Bank Ltd, Adoor, Kerala. This decision, made under Section 22 and Section 56 of the Banking Regulation Act, 1949, means that the bank will no longer be authorized to conduct banking activities in India. The revocation is effective from the end of business on April 24, 2023.

According to the central bank, it has allowed Kerala-based Adoor Co-operative Urban Bank to operate as a non-banking organisation and revoked its banking licence. A statement from the RBI states that the licence would be revoked as of the close of business on April 24, 2023.

"This makes it obligatory on the part of The Adoor Co-operative Urban Bank Ltd, Adoor, to stop conducting the business of 'banking' within the meaning of section 5(b) of the Act ibid, including acceptance of deposits from non-members with immediate effect," the RBI added.

The RBI instructed The Adoor Co-operative Urban Bank to ensure the repayment of unpaid and unclaimed deposits of non-members held by it, upon demand, even after being designated as a non-banking organisation.

A bank is a government-licensed organisation that offers banking services to the public, whereas an NBFC is a business that does so without having a bank licence, according to the Reserve Bank of India.

The Tamil Nadu State Apex Co-operative Bank, based in Chennai, was recently fined Rs. 16 lakh by the RBI for violating a number of rules, while Bombay Mercantile Co-operative Bank was fined Rs. 13 lakh for failing to transfer an eligible amount to the Depositor Education and Awareness Fund (DEAF) within the allotted time and transferring it late, and Janata Sahakari Bank, Pune, was fined Rs. 13 crore for failing to comply with directives.