Two urban cooperative banks of Gujarat namely Karjan Nagrik Sahakari Bank based in Vadodara and Bhuj Mercantile Co-operative Bank based in Ahmedabad came under RBI’s scalpel this week.
RBI imposed a monetary penalty on the Karjan Nagrik Sahakari Bank for violation of RBI instructions relating to KYC norms.
The Reserve Bank of India had issued a Show Cause Notice to the bank based on the finding of inspection for the financial position. The bank’s reply in the matter did not satisfy RBI which came to the conclusion that the violation was substantiated and warranted imposition of penalty.
Another UCB in Gujarat which had to duffer wrath of RBI is Bhuj Mercantile Co-operative Bank
The Reserve Bank of India had issued certain Directions to the bank ,whereby as from the close of business as on April 2, 2012, the aforesaid bank shall not, without prior approval in writing from the Reserve Bank of India, grant or renew any loans and advances, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits.
The Direction further puts restrictions on such matter as disburse or agree to disburse any payment whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets except to the extent and in the manner as notified in the RBI Directions dated April 2, 2012.
RBI has extended further the validity of directions which shall remain in force up to April 2, 2014 and are subject to review.