RBI Slaps Rs2.50 Lakh Penalty on 2 Cooperative Banks from Maharashtra and Gujarat
Moneylife Digital Team 09 August 2024
Reserve Bank of India (RBI) has imposed a penalty of Rs2.50 lakh on two cooperative banks, one each from Maharashtra and Gujarat, for non-compliance with the directions issued by the banking regulator. The highest penalty of Rs2 lakh has been imposed on Suvarnayug Sahakari Bank Ltd from Maharashtra. 
 
The other bank penalised by RBI is Nidhi Cooperative Bank Ltd from Gujarat.
 
Suvarnayug Sahakari Bank was penalised for non-compliance with directions issued by RBI on know-your-customer (KYC).
 
RBI statutory inspection revealed that Suvarnayug Sahakari Bank failed to update the KYC of its customers as required by the prescribed periodicity.
 
Nidhi Cooperative Bank was fined Rs50,000 for failing to comply with RBI's guidelines on loans and advances to directors, their relatives and firms or concerns in which they have an interest. RBI found that the Bank sanctioned loans where the relatives of its directors acted as guarantors.
 
"After considering the reply and oral submissions of both the banks during the personal hearing, RBI concluded that the charges of non-compliance with directions were substantiated and warranted imposition of monetary penalty," the central bank says.
 
In both cases, RBI says the penalties are based on deficiencies in regulatory compliance and are not intended to be pronounced on the validity of any transaction or agreement they entered into with their customer.
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