During the 2023-24 financial year, the Reserve Bank of India imposed 215 penalties totaling Rs 12.07 crore on cooperative banks on various acts of omission and commission. Earlier i.e. 2022-23, the RBI imposed 176 penalties worth Rs 14.04 crore.
Besides, the apex bank cancelled the license of 21 cooperative banks during the said FY.
Releasing its annual report for 2023-24 on Thursday, the RBI informed, “During 2023-24, the Department undertook enforcement action against Regulated Entity and imposed 281 penalties aggregating Rs 86.1 crore for contraventions/non-compliance with provisions of statutes and certain directions issued by the Reserve Bank from time to time”.
During the year, the RBI imposed 16 and 12 penalties worth Rs 23.68 crore and Rs 24.90 crore on Public Sector Banks and Private Sector Banks respectively.
In its analysis, the Indian Cooperative team found that during the 2023-24 financial year, 35 cooperative banks were fined in October 2023, which is the highest number of banks fined in the FY. In August and December, 22 and 28 cooperative banks were fined for breaching the RBI norms respectively.
The penalties on these cooperative banks have been imposed on several grounds in which most common charges related to Loans & advances to Directors or their relatives, KYC Norms, Placement of Deposits with Other Banks and many other things.
The RBI cancelled the license of the Adoor Cooperative Urban Bank, Faiz Mercantile Cooperative Bank, Shankarrao Pujari Nutan Nagari Sahakari Bank, Lucknow Urban Cooperative Bank, Jai Prakash Narayan Nagarik Sahakari Bank and others.
During the year, RBI also extended the period of directions on more than seventy cooperative banks for a further period. A few cooperative banks including Vaishali Shahri Vikas Cooperative Bank, Seva Vikas Cooperative Bank, Kandala Service Cooperative Bank and others were in the news for irregularities.
