RBI Imposes Rs 2.75 Lakh Penalty on 3 Cooperative Banks and India Home Loan
Moneylife Digital Team 11 June 2024
Reserve Bank of India (RBI) has imposed a penalty of Rs2.75 lakh on three cooperative banks and India Home Loan Ltd, a housing finance company (HFC), for non-compliance with the directions issued by the banking regulator.
 
The cooperative banks penalised by RBI are: Angul United Central Cooperative Bank Ltd from Odisha, Prakasam District Cooperative Central Bank Ltd from Andhra Pradesh (AP) and Vishwakalyan Sahakara Bank Niyamit from Karnataka.
 
Angul United Central Cooperative Bank was penalised Rs1 lakh for non-compliance with the master direction on know-your-customer (KYC). During an inspection by National Bank for Agriculture and Rural Development (NABARD), it was found that the Bank failed to implement a system of risk-based approach for undertaking periodic updation of KYC.
 
Karnataka-based Vishwakalyan Sahakara Bank Niyamit was penalised Rs25,000 for non-compliance with directions on exposure norms and  statutory or other restrictions on urban cooperative banks (UCBs). RBI found out that the charge of non-adherence to prudential inter-bank gross and counterparty exposure limit was sustained against the lender.
 
NABARD conducted a statutory inspection of the Prakasam District Cooperative Central Bank. The charge of delay in reporting fraud to NABARD was sustained. 
 
RBI, therefore, imposed a penalty of Rs50,000 on Prakasam District Cooperative Central Bank.
 
Mumbai-based India Home Loan was fined Rs1 lakh for non-compliance with specific provisions of the housing finance companies (NHB) directions issued by the National Housing Bank (NHB). RBI found that the charge of sanctioning loans beyond the prescribed loan-to-value (LTV) ratio was sustained, warranting the imposition of a penalty.
 
However, RBI clarified that its action against these three banks and the HFC is based on deficiencies in regulatory compliance and is not intended to pronounce the validity of any transaction or agreement entered into by the banks and HFC with their customers.
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