The Reserve Bank of India imposed penalties on four urban cooperative banks worth Rs 8.25 lakh on Monday. The banks penalized were Jolarpet Co-operative Urban Bank Limited, Shree Lodra Nagrik Sahakari Bank Limited, Malpur Nagarik Sahakari Bank Limited and Limbasi Urban Co-operative Bank Ltd
The RBI imposed a monetary penalty of Rs 50,000/- (Rupees Fifty thousand only) on The Jolarpet Co-operative Urban Bank Limited, Dist. Vellore, Tamil Nadu (the bank) for non-compliance with the directions issued by RBI on ‘Board of Directors – UCBs’ read with the directions issued by RBI on ‘Loans and advances to directors, their relatives, and firms/concerns in which they are interested’.
Besides, a monetary penalty of Rs 4.00 lakh (Rupees Four lakh only) on Shree Lodra Nagrik Sahakari Bank Limited, Lodra, Dist. Gandhinagar, Gujarat (the bank) for non-compliance with the directions issued by RBI on ‘Loans and advances to directors, relatives and firms/concerns in which they are interested’ and ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’.
Similarly, a monetary penalty of Rs 3.50 lakh (Rupees Three lakh Fifty thousand only) on Malpur Nagarik Sahakari Bank Limited, Malpur, Dist. Aravalli, Gujarat (the bank) for non-compliance with the directions issued by RBI on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’.
The Reserve Bank of India (RBI) imposed a monetary penalty of Rs 25,000/- (Rupees Twenty-Five thousand only) on The Limbasi Urban Co-operative Bank Ltd., Limbasi, Dist. Kheda, Gujarat (the bank) for non-compliance with the directions issued by RBI on ‘Loans and advances to directors, relatives and firms/concerns in which they are Interested’ read with the directions issued by RBI on ‘Loans and Advances to Directors etc. – Directors as surety/guarantors – Clarification’.
These penalties have been imposed in exercise of powers conferred on RBI under the provisions of Section 47-A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949.
This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers.
The Indian Cooperative research team found that the total number of banks penalized in October was 35 cooperative banks. Fine worth Rs 1,11,50,000 (Rupees One Crore Eleven Lakh Fifty thousand only) was imposed on them for breaching the rules and regulations of the RBI.
Out of 35 cooperative banks, nineteen are from Gujarat and Nine are from Maharashtra. Both states have the highest number of urban cooperative banks.
Besides, RBI extended the directions on 11 cooperative banks and issued a fresh direction on a bank namely Mahabhairab Co-operative Urban Bank Ltd., Tezpur in October month.
It bears recall that in September 2023, the RBI imposed a penalty on fifteen cooperative banks.