On Thursday again, RBI imposed a fine on five urban cooperative banks of Gujarat worth Rs 14 lakh. These banks are Surat National Co-operative Bank Ltd., Surat, Mahila Co-operative Nagrik Bank Ltd., Bharuch, Chhapi Nagrik Sahakari Bank Ltd., Banaskantha, People’s Co-operative Bank Ltd., Dholka, Gujarat and Vadnagar Nagrik Sahakari Bank Ltd., Vadnagar, Gujarat.
The Reserve Bank of India is not being gentle toward urban cooperative banks that are breaching the norms of the apex bank, quipped a UCB leader on a spate of news from the RBI on its slapping charges on the UCBs.
The Reserve Bank of India imposed a monetary penalty of Rs 6.00 lakh on Surat National Co-operative Bank for contravention of directions issued by RBI on ‘Co-operative Banks – Interest Rate on Deposits’ and ‘Customer Protection – Limiting Liability of Customers of Co-operative Banks in Unauthorised Electronic Banking Transactions’.
A monetary penalty of Rs 2.00 lakh has been imposed on Mahila Co-operative Nagrik Bank Ltd., Bharuch, Gujarat for non-compliance with the directions issued by RBI on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’ and ‘Know Your Customer (KYC)’.
Besides, RBI imposed a monetary penalty of Rs 1.00 lakh on the Chhapi Nagrik Sahakari Bank Ltd., Banaskantha, Gujarat for non-compliance with the directions issued by RBI on ‘Loans and advances to directors, relatives and firms /concerns in which they are interested’.
Similarly, a monetary penalty of Rs 3.00 lakh on People’s Co-operative Bank Ltd., Dholka, Gujarat for non-compliance with the directions issued by RBI on ‘Loans and advances to directors, relatives and firms/concerns in which they are interested’ and ‘Co-operative Banks – Interest Rate on Deposits’.
RBI imposed a monetary penalty of Rs 2.00 lakh on Vadnagar Nagrik Sahakari Bank Ltd., Vadnagar, Gujarat for contravention of directions issued by 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’, and ‘Co-operative Banks – Interest Rate on Deposits.
These penalties have been imposed in exercise of powers conferred on RBI under the provisions of Section 47 A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949.
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.
Only recently we carried a news item titled Seven Days, Seven Banks detailing how seven UCBs were fined by the RBI.