On Monday, the Reserve Bank of India imposed a penalty on two banks located in Gujarat. These are Jamanagar People’s Cooperative Bank and Shree Chhani Nagrik Sahakari Bank.
The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 4 lakh (Rupees Four Lakh only) on Shree Chhani Nagrik Sahakari Bank Limited, Vadodara (Gujarat) (the bank) for contravention of directions issued by RBI on ‘Board of Directors of Urban Co-operative Banks -Professionalisation and their Role – Do’s and Don’ts’, ‘Prudential Norms Income Recognition, Asset Classification etc.
Besides, a monetary penalty of Rs 1 lakh (Rupees One Lakh only) has been imposed on the Jamnagar people’s Co-operative Bank Ltd., Jamnagar (Gujarat) (the bank) for contravention of directions issued by RBI on ‘Income Recognition, Asset Classification and Provisioning Norms for Loans and Advances’ and ‘Reserve Bank of India (Co-operative Banks – Interest Rate on Deposits) Directions, 2016’.
This penalty has been imposed in exercise of powers vested in the RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.
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 bank with its customers.