RBI Imposes Rs4.50 Lakh Penalty on 4 Cooperative Banks for Non-compliance
Moneylife Digital Team 19 July 2024
Reserve Bank of India (RBI) has imposed a penalty of Rs4.50 lakh on four cooperative banks for non-compliance with the directions issued by the banking regulator. The highest penalty of Rs2.50 lakh has been imposed on Chandrapur District Central Cooperative (DCC) Bank Ltd from Maharashtra. 
 
Other banks penalised by RBI are: Vaishali DCC Bank Ltd from Bihar, DCC Bank Ltd from Andhra Pradesh and Sree Harihareshwara Urban Cooperative Bank Ltd from Karnataka.
 
Chandrapur DCC Bank was penalised for contravention of the provisions of Section 20 and Section 56 of the Banking Regulation Act (BR Act).
 
A statutory inspection of the Bank conducted by the National Bank for Agriculture and Rural Development (NABARD) found the lender had sanctioned loans to its directors.
 
Vaishali DCC Bank was fined Rs1 lakh for non-compliance with directions on know-your-customer (KYC) norms. RBI found that the bank failed to implement a system for the periodic review of risk categorisation of accounts.
 
Karnataka-based Sree Harihareshwara Urban Cooperative Bank was penalised Rs50,000 for non-compliance with directions on exposure norms and statutory or other restrictions for urban cooperative banks (UCBs). RBI found that the Bank failed to adhere to the prudential inter-bank (gross) and counterparty exposure limits.
 
DCC Bank from Andhra Pradesh was penalised Rs50,000 for non-compliance with guidelines issued by NABARD concerning fraud classification, reporting and monitoring. 
 
RBI says its action against these four cooperative 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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