The Reserve Bank of India has penalized five urban cooperative banks on various instances of flouting its norms. These banks are Mumbai based Janakalyan Sahakari Bank, Pune based Indapur Urban Co-operative Bank, Satara based Patan Urban Co-operative Bank, Pune Municipal Corporation Servants Co-operative Urban Bank and Pune Merchants Co-operative Bank.
Almost all the penalized UCBs are based in Maharashtra with four of them located in Pune alone. Janakalyan Sahakari Bank is the only urban cooperative bank which is based in Mumbai, Maharashtra.
The Reserve Bank of India has, by an order dated December 12, 2023, imposed a monetary penalty of Rs 5.00 lakh on Janakalyan Sahakari Bank Limited, Mumbai for non-compliance with the directions issued by RBI on ‘Reporting of Large Exposures to Central Repository of Information on Large Credits (CRILC)’.
A monetary penalty of Rs 1.00 lakh was imposed on Pune Merchants Co-operative Bank Limited, Pune by the RBI for non-compliance with the directions issued by the RBI on ‘Maintenance of Deposit Accounts -Primary (Urban) Co-operative Banks’.
RBI also imposed a monetary penalty of ?1.00 lakh on Pune Municipal Corporation Servants Co-operative Urban Bank for non-compliance with RBI directions on ‘Maintenance of Deposit Accounts – Primary (Urban) Co-operative Banks’.
A monetary penalty of Rs 5.00 lakh was imposed on Pune based Indapur Urban Co-operative Bank for non-compliance with directions issued by RBI on ‘Investments by Primary (Urban) Co-operative Banks’, ‘Maintenance of Deposit Accounts – Primary (Urban) Co-operative
Banks’, and ‘Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs’.
The Reserve Bank of India has, by an order imposed a monetary penalty of ?2.00 lakh on The Patan Urban Co-operative Bank Limited, Satara, Maharashtra for contravention of the provisions of Section 26A read with Section 56 of the Banking Regulation Act, 1949 (BR Act) and for non-compliance with the directions issued by RBI on ‘The Depositor Education and Awareness Fund’.
These actions are based on deficiencies in regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, reads the RBI press release.
These observations came to light during the statutory inspection of the banks conducted by RBI. Consequently, a notice was issued to the banks advising them to show cause as to why penalty should not be imposed on them for failure to comply with the said directions, as stated therein.
After considering the banks’ replies to the notice and oral submissions made by them during the personal hearing, RBI concluded that the charge of contravention of the aforesaid statutory provisions and non-compliance with the aforesaid directions issued by RBI was substantiated and warranted imposition of monetary penalty on the banks.
