Reserve Bank of India (RBI) has imposed a penalty of Rs46.65 lakh on five cooperative banks for non-compliance with the directions issued by the banking regulator. The highest penalty of Rs26.60 lakh has been imposed on Kalupur Commercial Cooperative Bank Ltd from Ahmedabad.
Other banks fined by RBI are Karad Urban Cooperative Bank Ltd from Karad, Janata Cooperative Bank Ltd from Maharashtra, Pragati Mahila Nagrik Sahakari Bank Maryadit from Chhattisgarh and Jila Sahakari Kendriya Bank Maryadit from Madhya Pradesh.
Kalupur Commercial Cooperative Bank was penalised for contravention of the provisions of section 26 A (2) of the Banking Regulation Act, (BR Act) and for non-compliance with directions on loans and advances to directors, their relatives and firms or concerns in which they are interested.
The statutory inspection revealed that Kalupur Commercial Cooperative Bank had not transferred eligible amounts to the depositor education and awareness fund (DEAF) within the prescribed period and renewed two advances to a company in which the relative of a director of the bank was interested, being a major shareholder in the company.
Karad Urban Cooperative Bank was fined Rs13.30 lakh for non-compliance with RBI directions on deposit interest rates. RBI says the charge for opening savings deposit accounts in the name of certain ineligible entities is also sustained against the lender.
Maharashtra-based Janata Cooperative Bank was penalised Rs5 lakh for non-compliance with RBI directions on the management of advances-urban cooperative bank (UCBs) and exposure norms and statutory or other restrictions on UCBs. The Bank sanctioned gold loans beyond the prescribed regulatory limit under the bullet repayment scheme and sanctioned loans to its nominal members beyond the prescribed regulatory limit.
The statutory inspection conducted by RBI revealed that Pragati Mahila Nagrik Sahakari Bank breached the prudential inter-bank (gross) exposure limit and did not undertake a periodic review of risk categorisation of its customers once in six months.
RBI, therefore, imposed a penalty of Rs1 lakh on Pragati Mahila Nagrik Sahakari Bank.
Madhya Pradesh-based Jila Sahakari Kendriya Bank has been penalised Rs75,000 for non-compliance with the provisions of section 27 of the BR Act.
National Bank for Agriculture and Rural Development (NABARD) conducted a statutory inspection of Jila Sahakari Kendriya Bank. The charge against the lender for the delay in submission of statutory and off-site surveillance system (OSS) returns to RBI and NABARD, respectively, was sustained.
Further, RBI says its action against these five 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.
