Last week, the Reserve Bank of India imposed a penalty on five cooperative banks for breaching RBI norms and regulations. It also extended the validity of directions on four cooperative banks.
The banks on which RBI imposed penalty included, Mandal Nagarik Sahakari Bank, Patan Nagrik Sahakari Bank, Dhrangadhra People’s Co-operative Bank, Balasore Bhadrak Central Co-operative Bank and Patliputra Central Cooperative Bank.
The Reserve Bank of India imposed a monetary penalty of Rs 1.50 Lakh on the Mandal Nagarik Sahakari Bank Ltd., Mandal, Dist. Ahmedabad, Gujarat for non-compliance with the directions issued by RBI on ‘Loans and advances to directors, relatives and firms/concerns in which they are interested’ read with ‘Loans and Advances to Directors etc. – Directors as surety/guarantors – Clarification’ and ‘Co-operative Banks – Interest Rate on Deposits’.
A monetary penalty of Rs 1.50 lakh has been imposed on Patan Nagarik Sahakari Bank Ltd., Patan, Gujarat for non-compliance with the directions issued by RBI on ‘Loans and advances to directors, relatives and firms/concerns in which they are Interested’ read with ‘Loans and Advances to directors etc. – directors as surety/guarantors – Clarification’ and ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’.
Besides, the Reserve Bank of India (RBI) imposed a monetary penalty of Rs 1.00 lakh on the Dhrangadhra People’s Co-operative Bank, Surendranagar, Gujarat for non-compliance with the directions issued by RBI on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’.
Similarly, a monetary penalty of Rs 50,000/ has been imposed on the Balasore Bhadrak Central Co-operative Bank Ltd., Balasore for non-compliance with the directions issued by RBI on “Membership of Credit Information Companies (CICs)”.
The Reserve Bank of India imposed a monetary penalty of Rs 1.50 lakh on the Patliputra Central Cooperative Bank Ltd, Bihar for non-compliance with the directions issued by RBI on ‘The Depositor Education and Awareness Fund Scheme, 2014 – Section 26A of Banking Regulation Act, 1949 – Operational Guidelines’ and ‘Reserve Bank of India – (Know Your Customer (KYC)) Directions, 2016’.
These actions are based on deficiencies 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, RBI clarifies.
Besides, the validity of direction has been extended for three months on Faiz Mercantile Cooperative Bank, Musiri Urban Co-operative Bank Limited, Musiri, Shree Mahalaxmi Mercantile Co-operative Bank Ltd., Dabhoi (Gujarat) and Banaras Mercantile Co-operative Bank Ltd., Varanasi (U.P).