While four Co-op Banks have been levied with penalties totalling more than Rs 44 lakhs by the RBI, the other two banks got no respite either as the RBI’s directions were extended for a few more months on them.
The Banks which were penalized include Tamil Nadu State Apex Co-operative Bank, Bombay Mercantile Co-operative Bank, Pune based Janata Sahakari Bank and Rajasthan based Baran Nagrik Sahkari Bank. UCBs on which RBI Directions will continue are United India Co-operative Bank Limited, Nagina, Bijnor (U.P.) and The Suri Friends’ Union Co-operative Bank Limited, Suri (West Bengal).
Coming to details, the RBI imposed a monetary penalty of Rs 16.00 lakh on The Tamil Nadu State Apex Co-operative Bank Limited, Chennai for contravention of the provisions of section 26 A (2) read with section 56 of the Banking Regulation Act, 1949 (BR Act) and for non-compliance with the directions issued by NABARD on “Review of Frauds – Guidelines on Monitoring and Reporting System”.
The statutory inspection of the Bank conducted by NABARD revealed, inter alia, that the bank failed to (i) transfer eligible amounts to the Depositor Education and Awareness Fund within the prescribed period and (ii) report a fraud to NABARD within the prescribed timeline and reported the same with delay.
The RBI slapped a fine of Rs 13 lakh on Bombay Mercantile Co-operative Bank Ltd., Mumbai for contravention of the provisions of section 26-A read with section 56 of the Banking Regulation Act, 1949 (BR Act).
The statutory inspection of the bank conducted by the RBI revealed, inter alia, contravention of the aforesaid provisions of the BR Act to the extent that the bank failed to transfer eligible amount to the Depositor and Education and Awareness Fund (DEAF) within the prescribed period and transferred the same with delay.
Pune based Janata Sahakari Bank Ltd was also fined an amount of Rs 13.00 lakh by the RBI for non-compliance with the RBI directions on ‘Interest Rate on Deposits’. The statutory inspection of the bank conducted by the RBI revealed, inter alia, that the bank failed to
make payment of applicable interest on balance amounts lying in the current accounts of deceased individual depositors / sole proprietorship concerns, at the time of repayment to the claimant.
The RBI has imposed a monetary penalty of Rs 2.00 lakh on Baran Nagrik Sahkari Bank Ltd., Baran, Rajasthan for contravention of Section 35 A read with Section 56 of the Banking Regulation Act, 1949. The inspection report of the bank revealed that the bank was not in
compliance with RBI Directions prohibiting grant of loans/advances/any other financial accommodation to relatives of its directors, among others.
Additionally, last week the RBI extended Directions on two UCBs namely United India Co-operative Bank Limited, Nagina, Bijnor (U.P.) and The Suri Friends’ Union Co-operative Bank Limited, Suri (West Bengal). While Direction was extended for three months in the case of United India Co-operative Bank, it was for six months in the case of Suri Friends’ Union Co-operative Bank.