RBI Slaps Rs48.7 Lakh Penalty on 3 Cooperative Banks from Maharashtra
Moneylife Digital Team 03 January 2025
Reserve Bank of India (RBI) has slapped a penalty of Rs48.7 lakh on three cooperative banks from Maharashtra for non-compliance with directions by the regulator. It includes Pune People's Cooperative Bank Ltd (Rs25 lakh), The Akola Janata Commercial Cooperative Bank Ltd (Rs15.40 lakh) and The Cosmos Cooperative Bank Ltd (Rs8.30 lakh).
 
RBI had directed Pune People's Cooperative Bank to deposit a certain amount to the Micro and Small Enterprises (MSE) Refinance Fund administered by Small Industries Development Bank of India (SIDBI) against the shortfall in achievement of priority sector lending (PSL) target for FY22-23. However, the lender failed to deposit the amount within the prescribed time, even after the issuance of a cautionary letter by RBI. The central bank then imposed a penalty of Rs25 lakh on Pune People's Cooperative Bank.
 
RBI conducted a statutory inspection of Akola Janata Commercial Cooperative Bank for the lender's financial position as of 31 March 2022 and 31 March 2023. RBI found the lender failed to transfer eligible unclaimed amounts to the depositor education and awareness fund (DEAF) within the prescribed time and did not settle the claims of some deceased depositors or release payments to survivors and nominees within the prescribed time. Considering Akola Janata Commercial Cooperative Bank's action as deficiencies in regulatory compliance, RBI imposed a penalty of Rs15.40 lakh on the lender.
 
A statutory inspection of Cosmos Cooperative Bank revealed that the lender levied foreclosure charges on floating-rate term loans sanctioned to some individual borrowers. RBI issued a show-cause notice for non-compliance with directions on the management of advances - urban cooperative banks (UCBs). After considering Cosmos Cooperative Bank's reply to the notice, oral submissions made during the personal hearing and examination of additional submissions, RBI found that the charge against the lender is sustained, warranting imposition of a monetary penalty of Rs8.30 lakh.
 
RBI also clarified that its action against these three cooperative banks 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 banks with their customers. Further, it says the imposition of a monetary penalty is without prejudice to any other action RBI may initiate against these banks.
 
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