The Reserve Bank of India imposed a penalty on seven cooperative banks on Monday for breaching the RBI norms. The maximum fine has been imposed on Uttar Pradesh’s Cooperative Bank worth Rs 28 lakh.
The cooperative banks fined by the RBI included, Textile Traders Co-operative Bank Ltd., Ahmedabad (Gujarat), Uttarpara Co-operative Bank Ltd., West Bengal, Solapur Siddheshwar Sahakari Bank Limited, Solapur (Maharashtra), Berhampur Co-operative Urban Bank Ltd., Odisha, Panihati Co-operative Bank Ltd, Ujjain Nagarik Sahakari Bank Maryadit, Ujjain, Madhya Pradesh and Uttar Pradesh Co-operative Bank Limited, Lucknow.
The Reserve Bank of India (RBI) has, by an order dated June 23, 2023, imposed a monetary penalty of Rs 28,00,000/- (Rupees Twenty-Eight Lakh only) on Uttar Pradesh’s Co-operative Bank Limited, Lucknow (the bank), for non-compliance with the Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016 and the directions of RBI on “Customer Service in State / District Central Co-operative Banks (StCBs / DCCBs)”.
A monetary penalty of Rs 1.00 lakh (Rupees One Lakh only) has been imposed on Ujjain Nagarik Sahakari Bank Maryadit, Ujjain (Madhya Pradesh) (the bank) for contravention of/ non-adherence with the directions issued by RBI on ‘Exposure Norms & Statutory/Other Restrictions – UCBs’ and ‘Investments by Primary (Urban) Co-operative Banks’.
Similarly, the Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 2,50,000/- (Rupees Two Lakh Fifty Thousand only) on Panihati Co-operative Bank Ltd. (the bank) for contravention of/ non-adherence with the directions issued by RBI on (i) “Exposure Norms and Statutory / Other Restrictions – UCBs” and (ii) “Know Your Customer (KYC) Direction, 2016”.
Besides, the RBI has imposed a monetary penalty of Rs 1.00 lakh (Rupees One lakh only) on The Berhampur Co-operative Urban Bank Ltd., Odisha (the bank) for contravention of directions issued by RBI on (i) ‘Exposure Norms and Statutory/Other Restrictions – UCBs’ and (ii) ‘Know Your Customer (KYC)’.
The Reserve Bank of India (RBl) has imposed a monetary penalty of Rs 1.50 lakh (Rupees One Lakh Fifty Thousand only) on Solapur Siddheshwar Sahakari Bank Limited, Solapur (Maharashtra) (the bank) for contravention of/ non-adherence with the directions issued by RBI on Know Your Customer (KYC).
A monetary penalty of Rs 2,50,000/- (Rupees Two Lakh Fifty Thousand only) on The Uttarpara Co-operative Bank Ltd., West Bengal (the bank) for contravention of/ non-adherence with the directions issued by RBI on “Exposure Norms and Statutory / Other Restrictions – UCBs” and “Know Your Customer (KYC)”.
The RBI imposed a monetary penalty of Rs 4.50 lakh (Rupees Four Lakh Fifty Thousand only) on Textile Traders Co-operative Bank Ltd., Ahmedabad (Gujarat).
This penalty has been imposed in exercise of powers vested in the RBI under the provisions of Section 47 A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.
Meanwhile, the news of penalty on cooperative banks is creating a negative perception among the respective co-op banks’ shareholders. Earlier, many co-operators associated with the cooperative banking sector raised the issues strongly and urged the RBI not to publish the penalty news.