In a striking development, cooperative banks have once again come under intense regulatory scrutiny, with the Reserve Bank of India (RBI) imposing the highest number of penalties on this segment during the financial year 2024-25 FY.
According to the central bank’s Annual Report, a staggering 264 penalties were levied on cooperative banks, far surpassing all other categories of regulated entities.
The total penalty amount on cooperative banks stood at Rs 15.63 crore, making them not only the most penalised group in terms of volume but also the highest in monetary terms across banking segments, barring only private sector banks (Rs 14.80 crore across 15 cases).
By contrast, public sector banks faced just 8 penalties amounting to Rs 11.11 crore, while private sector banks were penalised in 15 cases. Foreign banks, regional rural banks, and other entities such as NBFCs and housing finance companies saw considerably fewer enforcement actions.
The data highlights the RBI’s tightened grip on compliance and governance standards in the cooperative banking sector.
These penalties reflect regulatory lapses ranging from violation of prudential norms to failures in adherence to Know Your Customer (KYC), Anti-Money Laundering (AML) guidelines, and deficiencies in customer service.
With the cooperative banking sector playing a crucial role in serving rural and semi-urban populations, the RBI’s strict stance aims to ensure that these institutions remain robust, accountable, and better governed.
It has been observed that the majority of penalties have been imposed on urban cooperative banks, in comparison to rural cooperative banks, which comprise state cooperative banks and district central cooperative banks.
Impososing penalties on co- operative bank is one side of coin but other side is many co-operative banks are having frauds of such magnitude that depositors have lost their deposit amount due to amalgamation or cancellation of licence of bank due to failures of RBI.
Where is Integrity, responsibility, accoutability, trasferancy of RBI.
Impososing penalties on co- operative bank is one side of coin but other side is many co-operative banks are having frauds of such magnitude that depositors have lost their deposit amount due to amalgamation or cancellation of licence of bank due to failures of RBI.
Where is Integrity, responsibility, accoutability, trasferancy of RBI.