RBI Imposes Rs5 Lakh Penalty on 4 Cooperative Banks, 1 NBFC
Moneylife Digital Team 16 May 2025
Reserve Bank of India (RBI) has imposed penalties of Rs5 lakh on four cooperative Banks and one non-banking financial company (NBFC) for non-compliance with the directions issued by the banking regulator. The highest penalty of Rs2 lakh has been imposed on Karnataka Central Cooperative Bank Ltd.
 
Other entities penalised by RBI are Mangalore Cooperative Town Bank Ltd, Shimoga District Cooperative Central Bank Ltd and Swarna Bharathi Sahakara Bank Niyamitha from Karnataka and Grewal Brothers Finance Company Private Ltd, an NBFC from Kerala.
 
Karnataka Central Cooperative Bank and Shimoga District Cooperative Central Bank have been penalised Rs2 lakh and Rs1 lakh, respectively for contravention of provisions of Section 20 of the Banking Regulation Act, 1949 (BR Act).
 
RBI statutory inspection of Karnataka Central Cooperative Bank and Shimoga District Cooperative Central Bank, which was conducted by National Bank for Agriculture and Rural Development (NABARD), revealed that both lenders had sanctioned director-related loans.
 
RBI conducted a statutory inspection of Mangalore Cooperative Town Bank and found that the lender had also sanctioned director-related loans. As a result, RBI imposed a penalty of Rs1 lakh on Mangalore Cooperative Town Bank.
 
Swarna Bharathi Sahakara Bank has been fined Rs50,000 for violating Section 31 of the BR Act. RBI found that the lender failed to submit its accounts and balance sheet for the FY23–24, along with the auditor’s report, within the prescribed timeline.
 
Kerala-based Grewal Brothers Finance Company has been penalised for non-compliance with certain provisions of the RBI's Master Direction – NBFC Scale-Based Regulation Directions, 2023. The NBFC failed to obtain prior written approval from RBI before making changes in its management, which led to a change in more than 30% of its directors, excluding independent directors.
 
In all five cases, RBI said penalties are based on deficiencies in regulatory compliance and are not intended to pronounce on the validity of any transaction or agreement they entered into with their customers.
Comments
SEBI Cracks Down on Varyaa IPO Misuse, Freezes Promoters' Shares, Bars Inventure over Diversion of 71% of Proceeds
Moneylife Digital Team 16 May 2025
Market regulator Securities and Exchange Board of India (SEBI) has exposed what it calls a ‘collusive’ scheme to siphon off most of the funds from Varyaa Creations Ltd’s small and medium enterprises (SME) initial public offering...
Research Analyst Manas Jaiswal Slapped with Rs5 Lakh Penalty by SEBI
Moneylife Digital Team 16 May 2025
Market Regulator Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs5 lakh on Manas Jaiswal, a SEBI-registered research analyst (RA), for multiple violations of rules and regulations. Following an inspection...
NSEL Scam: Supreme Court Upholds Priority of MPID Act over RDB Act, SARFAESI and IBC
SN Thyagarajan (Bar  and  Bench) 15 May 2025
The Supreme Court on Thursday held that the Maharashtra Protection of Interest of Depositors (MPID) Act overrides the provisions of Central financial recovery statutes, including the Securitisation and Reconstruction of Financial...
Fraser and Company, Promoters Penalised Rs5 Lakh by SEBI for Regulatory Violations
Moneylife Digital Team 15 May 2025
Market regulator Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs5 lakh on Fraser and Company Ltd (noticee 1) along with Yogeeta Shivhare (noticee 2) and Omkar Shivhare (noticee 3), both promoters, as well as...
Array
Free Helpline
Legal Credit
Feedback