While the Karnataka State Co-operative Apex Bank was levied a hefty penalty this week by the RBI, there are four urban cooperative banks, whose Directions were extended. These banks are— National Urban Co-operative Bank, Bahraich, Sri Mallikarjuna Pattana Sahakari Bank Niyamitha, Maski (Karnataka), Nashik Zilla Girna Sahakari Bank and Mumbai based Raigad Sahakari Bank.
The Reserve Bank of India has extended the directions issued to the National Urban Co-operative Bank Ltd., Bahraich (U.P.) for a period of three months from April 23, 2023 to July 22, 2023, subject to review. The Bank has been under direction from the close of business of July 22, 2022. The said direction was extended till April 22, 2023. Now the validity of the directive has been extended for a period of three (03) months from April 23, 2023 to July 22, 2023.
Another UCB which got no respite and got RBI’s Directive extended on it is Sri Mallikarjuna Pattana Sahakari Bank Niyamitha, Maski, Karnataka. In a release RBI said the Directive on the UCB shall continue to apply for a further period of three months from April 19, 2023 to July 18, 2023, subject to review.
In the release the RBI had said “The Reserve Bank of India is satisfied that in the public interest, it is necessary to extend the period of operation of the Directive which has been modified from time to time and the last being one dated January 18, 2023 issued to Sri Mallikarjuna Pattana Sahakari Bank Niyamitha, Maski, Karnataka.
The third UCB which also failed to get any respite this week is Nashik Zilla Girna Sahakari Bank Limited, Nashik, Maharashtra. The Reserve Bank of India issued Directions to the UCB dated July 15, 2022 for a period of six months up to January 18, 2023, the validity of which was extended up to April 18, 2023 earlier.
“The Reserve Bank of India is satisfied that in the public interest, it is necessary to extend the period of operation of the Directive issued to Nashik Zilla Girna Sahakari Bank Limited, Nashik for a further period of three months from April 19, 2023 to July 18, 2023, subject to review”, read the release.
Mumbai based Raigad Sahakari Bank Limited was yet another Bank which was given no respite by the RBI. The Reserve Bank of India, had placed Raigad Sahakari Bank Limited, Mumbai, Maharashtra under Directions from the close of business on July 18, 2022. The validity of the directions was extended from time-to-time, the last being up to April 18, 2023.
This week again in a release the RBI said “It is hereby notified for the information of the public that, the Reserve Bank of India, in the exercise of powers vested in it, hereby directs that the aforesaid Directions shall continue to apply to the bank till July 18, 2023, subject to review.
In all the above cases the RBI clarified that “A copy of the directive order should be displayed at the bank’s premises for the perusal of public and the issue of the Directions by the RBI should not per se be construed as cancellation of banking license by RBI. The Reserve Bank may consider modifications of these Directions depending upon circumstances.
It bears recalling that the week began with the Reserve Bank of India imposing a monetary penalty of Rs 23.23 lakh on The Karnataka State Co-operative Apex Bank for non-compliance with the Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016 as well as directions issued by RBI on ‘Membership of Credit Information Companies (CICs)’.