The Reserve Bank of India has imposed penalties on two urban co-op banks in quick succession. They are Deola Merchants’ Co-operative Bank of Nashik and Nakodar Hindu Urban Co-operative Bank based in Punjab.
The Reserve Bank of India imposed a monetary penalty of ?5.00 lakh on the Nakodar Hindu Urban Co-operative Bank Ltd., Nakodar, Punjab for non-compliance with certain directions issued by RBI contained in the Master Circular dealing with ‘Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs’.
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.
The second UCB penalized is Deola Merchants’ Co-operative Bank. The UCB has been fined Rs 25,000 thousand for contravention of the directions issued by the RBI to Urban Co-operative Banks on Board of Directors and Exposure Norms.