The Reserve Bank of India imposed monetary penalties on four urban cooperative banks and issued a fresh direction on Shirpur Merchants’ Cooperative Bank for a further period of six months on Monday.
The banks on which RBI imposed fines are Parwanoo Urban Cooperative Bank, Rohtak Central Cooperative Bank, Raj Laxmi Mahila Urban Cooperative Bank and Nagar Sahakari Bank, Etawah.
The Reserve Bank of India imposed a monetary penalty of Rs 1 lakh on the Parwanoo Urban Co-operative Bank Ltd., Parwanoo (the bank) for non-compliance with the directions issued by RBI relating to Prudential Norms on Income Recognition, Asset Classification and Provisioning (IRAC).
A monetary penalty of Rs 2 lakh has been imposed on the Rohtak Central Co-operative Bank Limited, Rohtak (the bank) for contravention of the provisions of section 20 (1) and section 26 A (2) read with section 56 of the Banking Regulation Act, 1949 (BR Act).
Besides, a penalty of Rs 5 lakh imposed on the Raj Laxmi Mahila Urban Co-operative Bank Ltd., Jaipur (the bank) for non-compliance with the specific directions issued by RBI under Supervisory Action Framework (SAF).
The Reserve Bank of India imposed a monetary penalty of Rs 4 lakh on Nagar Sahkari Bank Limited, Etawah (the bank) for non-compliance with directions issued by RBI on ‘Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs’.
These penalties have been imposed in exercise of powers vested in the RBI, conferred under the provisions of section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act.
The issue of the directions on Shirpur Merchants’ Cooperative Bank by the RBI should not per se be construed as cancellation of banking license by RBI. The bank will continue to undertake banking business with restrictions till its financial position improves. The Reserve Bank may consider modifications of these Directions depending upon circumstances.
These Directions shall remain in force for a period of six months from the close of business on April 08, 2024 and are subject to review.
