RBI Slaps Rs3.50 Lakh Penalty on Manipur State Cooperative Bank, Urban Cooperative Bank for Non-compliance
Moneylife Digital Team 28 August 2024
Reserve Bank of India (RBI) has imposed a penalty of Rs3.50 lakh on two cooperative banks for non-compliance with the directions issued by the banking regulator. The highest penalty of Rs2 lakh has been imposed on Manipur State Cooperative Bank Ltd.
 
The other bank penalised by RBI is Cuttack-based Urban Cooperative Bank Ltd.
 
Manipur State Cooperative Bank has been penalised for contravention of provisions of Section 9 of the Banking Regulation Act (BR Act) and non-compliance with the provisions of the Credit Information Companies (CIC) Regulation Act.
 
RBI's statutory inspection revealed that the Bank had failed to dispose certain non-banking assets (NBAs) within the prescribed period and failed to report credit information of customers to four CICs.
 
Urban Cooperative Bank was fined Rs1.50 lakh for failing to comply with RBI directives on know-your-customer (KYC), exposure and other statutory restrictions specific to urban cooperative banks (UCBs). RBI found that the Bank did not review the risk categorisation of its customers or update their KYC details within the prescribed timeframes. Additionally, the Bank exceeded the interbank counterparty exposure limit.
 
RBI says its action against these two 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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