RBI Penalises Udyam Vikas and Sawantwadi UCB for Not Complying with Regulatory Directions
Moneylife Digital Team 16 July 2021
The Reserve Bank of India (RBI) has imposed monetary penalties on Pune-based Udyam Vikas Sahakari Bank, and Sindhudurg-based Sawantwadi Urban Cooperative Bank, for non-compliance with various regulatory directions.
Udyam Vikas Sahakari Bank was penalised with Rs2 lakh penalty for contravention of the directions issued by the RBI on exposure norms and statutory / other restrictions for urban cooperative banks (UCBs). 
Sawantwadi Urban Cooperative Bank was fined Rs1 lakh for contravention of and non-compliance with directions contained in the supervisory action framework (SAF) issued by the banking regulator under sections 35A and section 36(1) read with section 56 of the Banking Regulation Act, 1949.
The inspection report of Udyam Vikas Sahakari Bank based on its financial position as on 31 March 2019, revealed that the bank had not adhered to prudential inter-bank gross exposure limit and prudential inter-bank single counter party limit. 
Sawantwadi Urban Cooperative Bank had contravened one of the SAF instructions by sanctioning fresh loans.
Based on the inspection reports, the central bank issued notices to the banks to show cause as to why penalty should not be imposed for violation of the said directions. 
After considering the banks’ replies, the banking regulator concluded that the charges of non-adherence and violation of RBI directions were substantiated and warranted imposition of monetary penalty.
“This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers,” RBI clarified. 
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