At the start of the week, the banking regulator RBI comes out with the list of fines it has imposed on the banking sector. This week six co-op banks have been fined. There are two other financial entities RBL Bank and Housing Development Finance Corporation, which have also been fined heavily.
The Reserve Bank of India has imposed a monetary penalty of Rs 1.00 lakh on Imperial Urban Co-operative Bank Ltd., Jalandhar, Punjab. The UCB was found guilty of contravention of Section 35A read with Section 56 of the Banking Regulation Act, 1949.
Rs 2.00 lakh was imposed on the Noida based Noble Co-operative Bank by the RBI for contravention of Section 35 A read with Section 56 of the Banking Regulation Act, 1949.
The Reserve Bank of India imposed a monetary penalty of Rs 1.00 lakh on Raigad Sahakari bank, Mumbai. The UCB was fined for contravention of operational instructions issued under Supervisory Action Framework (SAF).
MP’s Mandsaur based Smriti Nagrik Sahakari Bank Maryadit was fined with a penalty of Rs 4.00 lakh for non-compliance with directions issued by RBI on Exposure Norms & Statutory/Other Restrictions on UCBs and Know Your Customer (KYC).
The Reserve Bank of India imposed a monetary penalty of Rs 50,000 on Jila Sahakari Kendriya Bank Maryadit, Raisen for non-compliance with the provisions of the Banking Regulation Act, 1949 (the Act) and directions issued by NABARD on submission of returns by banks.
Solapur based Lokmangal Co-operative Bank was fined Rs 3.00 lakh by the RBI for contravention of the directions issued by RBI to Urban Co-operative Banks on Exposure Norms and Statutory/Other Restrictions-UCBs.
In cases of all the above-mentioned banks, RBI clarified that the 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 bank with its customers.
Interestingly, Reserve Bank of India has also imposed a monetary penalty of Rs Two crore twenty-seven lakh twenty-five thousand on RBL Bank Limited for non-compliance with certain provisions of the directions issued by RBI on the ‘Internal Ombudsman Scheme, 2018’, ‘Fair Practices Code for Lenders’, ‘Credit Card Operations of Banks’, ‘Managing Risks and Code of Conduct in Outsourcing of Financial Services by banks’ and ‘Recovery Agents engaged by Banks’.
Yet another entity, not from the co-op banking sector fined by the RBI is Housing Development Finance Corporation Limited, Mumbai. It was fined Rs 5 lakh.