The Reserve Bank of India has, by an order dated June 05, 2023, imposed a monetary penalty of Rs 10.00 lakh (Rupees ten lakh) on The Co-operative Bank of Rajkot Ltd., in Gujarat.
The bank was faulted for contravention of directions issued by RBI on ‘Reporting of unauthorised transactions by customers to banks’, ‘Names as Appearing in the Certificate of Registration and the Licence – Use of – Primary (Urban) Co-operative Banks (UCBs)’ and ‘Frauds in UCBs: Changes in Monitoring and Reporting mechanism’.
This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, said the RBI.
On the same day the RBI imposed a monetary penalty of Rs 2.00 lakh (Rupees Two Lakh only) on Telangana State Cooperative Apex Bank Limited, Hyderabad.
The apex bank was found violating the provisions of section 26 A (2) read with section 56 of the Banking Regulation Act, 1949 (BR Act). This penalty has been imposed in exercise of powers conferred on RBI under section 47A (1) (c) read with sections 46 (4) (i) and 56 of the BR Act.
This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
The statutory inspection of the bank conducted by NABARD with reference to the bank’s financial position as on March 31, 2020, and examination of the Inspection Report and all related correspondence pertaining to the same revealed, inter alia, that the bank failed to transfer eligible amounts to the Depositor Education and Awareness Fund within the prescribed period.
But the highest penalty was imposed on the Bihar State Co-operative Bank Limited, Patna.The Reserve Bank of India has, by an order dated June 05, 2023, imposed a monetary penalty of Rs 60.20 lakh (Rupees Sixty Lakh and Twenty Thousand) on the co-op bank.
The co-op bank was found guilty of contravention of the provisions of sections 24(3), 26 and 27(1) read with section 56 of the Banking Regulation Act, 1949 (BR Act) and the Banking Regulation (Co-operative Societies) Rules, 1966 (BR Rules).
It was fined for non-compliance with the Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016 as well as directions of RBI on “Customer Service in State / District Central Co-operative Banks (StCBs / DCCBs)”, both issued under BR Act.
Also, it was faulted for non-compliance with the directions on “Membership of Credit Information Companies (CICs)” issued by the RBI under the Credit Information Companies (Regulation) Act, 2005 [CIC (R) Act]; and non-compliance with the directions on “Off-site Surveillance System – Revision of Returns” issued by NABARD under section 27(3) of the BR Act
A UCB based in Meghalaya was also fined by the RBI this week. RBI has imposed, by an order dated June 9, 2023, a monetary penalty of Rs 6,00,000/- (Rupees Six lakh) on Jowai Cooperative Urban Bank Limited, Jowai, Meghalaya.
The UCB was found guilty of contravention of RBI directions to Urban Cooperative Banks on (i) ‘Exposure Norms and Statutory / Other Restrictions – UCBs’ and (ii) Know Your Customer (KYC) Directions, 2016.
