RBI Imposes Rs4.75 Lakh Penalty on 5 Cooperative Banks for Non-compliance

Moneylife Digital Team 30 April 2024

Reserve Bank of India (RBI) has imposed a penalty of Rs4.75 lakh on five cooperative banks for non-compliance with the directions issued by the banking regulator. The highest penalty of Rs2 lakh has been imposed on The Central Cooperative Bank Ltd from Rajasthan.

Other banks penalised by RBI are: Vaish Cooperative Adarsh Bank Ltd from New Delhi, Chitradurga District Cooperative Central Bank Ltd from Karnataka while Indira Mahila Sahakari Bank Ltd and Samarth Sahakari Bank Ltd are from Maharashtra.

Central Cooperative Bank and Chitradurga District Cooperative Central Bank were penalised Rs2 lakh and Rs50,000, respectively for non-compliance with the directions issued by the National Bank For Agriculture And Rural Development (NABARD) on frauds - guidelines for classification, reporting and monitoring.

RBI's statutory inspection of both these banks found that the charge of delay in reporting fraud was sustained.

Vaish Cooperative Adarsh Bank was fined Rs1 lakh for non-compliance with the directions issued by RBI on know your customer (KYC). The Bank was also found to be allotting multiple unique customer identification codes (UCICs) to customers.

Maharashtra-based Indira Mahila Sahakari Bank was penalised Rs75,000 for non-compliance with provisions on policy and practice regarding nominal membership and exposure norms and statutory or other restrictions - urban cooperative bank (UCBs). RBI found that the charge of sanctioning loans to nominal members above the prescribed ceiling was sustained against the lender.

Samarth Sahakari Bank was fined Rs50,000 for non-compliance with RBI directions on exposure norms and statutory or other restrictions -UCBs. RBI found that the charge of sanctioning unsecured advances above the permissible limit was sustained.

RBI says its action against these five 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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