176 Cooperative Banks Fined Rs14.04 Crore by RBI in FY22-23: Govt
Moneylife Digital Team 18 December 2023
Reserve Bank of India (RBI) has imposed a penalty of Rs14.04 crore on as many as 176 cooperative banks during fiscal year (FY)22-23, while seven banks from the private sector paid a fine of Rs12.17 crore for non-compliance with the guidelines, rules and regulations issued by RBI, the Lok Sabha was informed. RBI imposed penalties of Rs40.39 crore on banks, non-banking financial companies (NBFCs) and other regulated entities (REs) for breach of norms during FY22-23.
In a written reply, Dr Bhagwat Karad, minister of state for finance, says, "RBI has issued guidelines on fair practices code to be adopted by banks, NBFCs and housing finance companies (HFCs), and these guidelines cover various aspects related to lending such as transparency and disclosure of various terms and conditions of loan and changes therein, inappropriate behaviour during recovery of loans, release of securities after repayment of loan, and loan appraisal."
The banking regulator is mandated to take enforcement action as per enforcement policy and framework approved by the board for financial supervision (BFS) of RBI, in the form of imposition of monetary penalty on REs for contraventions of different statutes and directions issued thereunder, the minister says.
According to the information shared in the lower house, during FY22-23, RBI also imposed a penalty of Rs4.65 crore on five foreign banks, Rs4.39 crore on 11 NBFCs, Rs3.65 crore on seven public sector banks (PSBs), Rs97 lakh on small finance banks (SFBs), Rs42 lakh on one regional rural bank and Rs10 lakh on two HFCs.
Four members of Parliament (MPs) from Maharashtra, Dhairyasheel Sambhajirao Mane, Prataprao Jadhav, Shrirang Appa Barne and Sanjay Sadashivrao Mandlik have also asked whether RBI has enhanced the scrutiny of banks, non-banks and other REs, and tools and measures used to monitor lenders. 
In response, Dr Karad, the minister of state, says RBI conducts inspections of REs under extant provisions of various statutes such as the Banking Regulation Act and the RBI Act. "With the enhanced offsite and onsite capabilities, the focus and scope of such inspections have improved in recent times."
"Further, all banks and other REs are required to comply with the guidelines issued by RBI from time to time. RBI examines compliance to its guidelines on a sample basis during the supervisory assessment and any non-compliance is taken up with the respective supervisory entities for rectification apart from initiating supervisory and enforcement action, as deemed fit," Dr Karad says. 
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