A number of co-op banks from across the states were penalized by the RBI for various acts of omissions and commissions. Some of these top banks included Bharat Co-operative Bank Mumbai, Zoroastrian Co-operative Bank and Indian Mercantile Co-operative Bank, Lucknow.
There were banks also from South India such as Tiruchirappalli District Central Cooperative Bank, Cumbum Co-operative Town Bank, AP, Chittoor Co-operative Town Bank and National Co-operative Bank, Bengaluru, which were penalized by the RBI.
The Reserve Bank of India imposed a monetary penalty of Rs 20.00 lakh on Indian Mercantile Co-operative Bank Lucknow, Uttar Pradesh. The UCB was faulted for non-compliance with the directions issued by RBI on ‘Income Recognition, Asset Classification, Provisioning and Other Related Matters’ (IRAC norms).
As stated earlier, Zoroastrian Co-operative Bank was penalized Rs 1.25cr for non-compliance with RBI directions on ‘Discounting of Bills by UCBs – Restricted Letters of Credit (LC)’ and the provisions of the Co-operative Banks (Period of Preservation of Records) Rules, 1985 (Rules) framed under section 45Y read with section 56 of Banking Regulation Act, 1949 (BR Act).
RBI imposed a monetary penalty of Rs 50.00 lakh on Bharat Co-operative Bank (Mumbai) Limited, Maharashtra. The UCB was faulted for non-compliance with the directions issued by RBI on ‘Income Recognition, Asset Classification, Provisioning and Other Related Matters’ (IRAC norms).
Tiruchirappalli District Central Cooperative Bank was fined Rs 1 lakh by the RBI as the UCB was faulted for non-adherence/violation of directions issued under Income Recognition, Asset Classification, Provisioning and Other Related Matters.
The Reserve Bank of India imposed a monetary penalty of Rs 3.00 lakh on The Cumbum Co-operative Town Bank Ltd., Cumbum, Prakasam District, Andhra Pradesh as the UCB was found guilty of non-adherence / violation of directions issued under Frauds – Classification and Reporting and Board of Directors – UCBs.
The Chittoor Co-operative Town Bank Limited, Andhra Pradesh was fined for violation of directions issued under Establishment of Depositor Education and Awareness Fund, Management of Advances – UCBs, lncome Recognition, Asset Classification, Provisioning and Other Related Matters-UCBs and Know Your Customer (KYC)/Anti-Money Laundering (AML)/ Combating of Financing of Terrorism (CFT) Guidelines. The fine amount was Rs 6 lakhs.
And finally, the Reserve Bank of India imposed a monetary penalty of Rs 2.00 lakh on The National Co-operative Bank Limited, Bengaluru, Karnataka. The UCB was guilty of non-adherence / violation of directions issued under Supervisory Action Framework for Urban Co-operative Banks (UCBs).
RBI, however clarified that these actions are based on deficiency 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.