Reserve Bank of India imposed monetary penalties on four cooperative banks for breaching the RBI norms. These banks are Nakodar Hindu Urban Cooperative Bank, Zoroastrian Cooperative Bank, Bombay Mercantile Cooperative Bank and Navnirman Cooperative Bank.
The RBI imposed a monetary penalty of Rs 6 lakh on the Nakodar Hindu Urban Cooperative Bank Ltd., Nakodar (the bank) for non-compliance with the directions issued by RBI on Income Recognition, Asset Classification, Provisioning and Other Related Matters (IRAC Norms) and specific directions issued by the RBI under Supervisory Action Framework (SAF).
A monetary penalty of Rs 43.30 lakh on Zoroastrian Co-operative Bank Ltd has been imposed for non-compliance with the directions issued by RBI on ‘Maintenance of Deposit Accounts’, ‘Interest Rate on Deposits’ and ‘Frauds in UCBs: Changes in Monitoring and Reporting mechanism’.
Similarly, the apex bank imposed a monetary penalty of Rs 63.30 lakh on Bombay Mercantile Co-operative Bank Ltd. (the bank) for non-compliance with the directions issued by RBI on ‘Exposure Norms and Statutory / Other Restrictions – UCBs’, ‘Gold Loan – Bullet Repayment – UCBs’ and ‘Unclaimed Deposits and Inoperative/ Dormant Accounts in UCBs’.
And, Rs 1.00 lakh monetary penalty imposed on the Navnirman Co-operative Bank Ltd., Ahmedabad, Gujarat (the bank) for non-compliance with the directions issued by the RBI on ‘Loans and Advances to directors, relatives and firms/concerns in which they are Interested’ read with ‘Loans and Advances to Directors etc. – Directors as surety/guarantors – Clarification’.
These penalties have been imposed in exercise of powers conferred on RBI under the provisions of section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
The 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.
Only a day before, the Reserve Bank of India has cancelled the license of one more urban cooperative bank- Jai Prakash Narayan Nagari Sahakari Bank and extended the period of directions on Guru Raghavendra Sahakara Bank.