RBI Imposes Rs39.30 Lakh Penalty on 5 Cooperative Banks for Non-compliance
Moneylife Digital Team 01 March 2024
Reserve Bank of India (RBI) has imposed a penalty of Rs39.30 lakh on five cooperative banks for non-compliance with the directions issued by the banking regulator. The highest penalty of Rs23.30 lakh has been imposed on Nagpur-based Shikshak Sahakari Bank Ltd.
 
Other banks penalised by RBI are: Progressive Cooperative Bank Ltd from Mumbai, Solapur District Central Cooperative Bank Ltd from Maharashtra, while Noble Cooperative Bank Ltd and Adarsh Mahila Cooperative Bank Ltd from Uttar Pradesh.
 
Shikshak Sahakari Bank was penalised for non-compliance with operational instructions issued by RBI under the supervisory action framework for primary urban cooperative banks (UCBs).
 
"The statutory inspection conducted by RBI with reference to its financial position as of 31 March 2021 and examination of the risk assessment report (RAR), inspection report (IR) and all correspondence related revealed that Shikshak Sahakari Bank had sanctioned certain fresh loans and advances carrying risk weight of more than 100%, during the FY20-21,” RBI says.
 
Noble Cooperative Bank was penalised Rs5 lakh for non-compliance with the specific directions issued by RBI under the supervisory action framework (SAF). The Bank had sanctioned uncollateralised fresh loans and advances.
 
Statutory inspection of lender conducted by the National Bank for Agriculture and Rural Development (NABARD) regarding its financial position as of 31 March 2023 and examination of the IR (inspection report) and all correspondence related revealed that the Solapur District Central Cooperative Bank had not transferred the eligible amount to the Depositor Education and Awareness (DEA) Fund. 
 
RBI, therefore, imposed a penalty of Rs5 lakh on Solapur District Central Cooperative Bank. 
 
Uttar Pradesh-based Adarsh Mahila Cooperative Bank was penalised Rs5 lakh for non-compliance with the directions issued by RBI on loans and advances to directors, their relatives, and firms or concerns in which they are interested and specific directions issued by RBI under SAF.
 
Adarsh Mahila Cooperative Bank had sanctioned a loan where a relative of one of the directors of the Bank was interested, offered interest rates higher than those offered by State Bank of India (SBI) on deposits for various tenors and sanctioned fresh loans and advances carrying risk weights more than 100%.
 
RBI imposed a penalty of Rs1 lakh on Mumbai-based Progressive Cooperative Bank for non-compliance with the directions on exposure norms and statutory or other restrictions – UCBs and investments by primary UCBs. The Bank had not adhered to the prudential inter-bank gross exposure limit and prudential inter-bank counter-party limit. 
 
Further, RBI says its action against these five banks is based on deficiencies in regulatory compliance and is not intended to pronounce on the validity of any transaction or agreement entered into by the banks with their customers.
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