New Delhi:
The Reserve Bank of India (RBI) has wielded its regulatory hammer, imposing significant fines of up to ₹60 lakh on 10 cooperative banks across the nation.
The penalties come as a consequence of these banks failing to adhere to various regulatory guidelines set forth by the central bank.
Notably, the banks sanctioned hail from diverse regions including West Bengal, Uttar Pradesh, Tamil Nadu, Maharashtra, and Himachal Pradesh.
Failure to Comply: RBI’s Penalty Decree
The RBI’s punitive measures were disclosed through statements issued on March 26 and 27, outlining the violations committed by each bank.
Despite the stringent actions taken, the RBI clarified that these penalties are not intended to undermine the legitimacy of any transactions or agreements made by the banks with their customers.
Banks and Their Offences
Here’s a breakdown of the fined banks and their respective infractions:
Howrah District Central Co-operative Bank, Howrah (West Bengal) – The bank incurred a fine of ₹1 lakh for non-compliance with Know Your Customer (KYC) guidelines, attributed to irregular updates of KYC details and a lack of risk classification systems for accounts.
Excellent Co-operative Bank, Mumbai (Maharashtra)
Mumbai’s Excellent Co-operative Bank Limited faced a ₹1 lakh fine for failing to transfer requisite amounts to the Depositor Education and Awareness Fund within stipulated timelines.
Standard Urban Co-operative Bank, Aurangabad (Maharashtra)
A fine of ₹50,000 was levied on Standard Urban Co-operative Bank Limited for similar non-compliance regarding the Depositor Education and Awareness Fund.
Rajapalayam Co-operative Urban Bank, Rajapalayam (Tamil Nadu)
This bank was fined ₹75,000 for not adhering to RBI directives regarding loans and advances extended to directors, their relatives, and associated entities.
Mandi Urban Co-operative Bank, Himachal Pradesh
A hefty fine of ₹6 lakh was imposed on Mandi Urban Co-operative Bank Limited for breaching prudential interbank exposure limits.
Chikkamagaluru District Co-operative Central Bank Limited, Chikkamagaluru, Karnataka
This bank faced a ₹50,000 penalty for non-compliance with NABARD instructions on fraud reporting.
Dindigul Urban Co-operative Bank Limited, Dindigul, Tamil Nadu
A fine of ₹25,000 was slapped on this bank for exceeding prescribed loan limits to nominal members.
Janalakshmi Co-operative Bank, Nashik
Janalakshmi Co-operative Bank incurred a fine of nearly ₹60 lakh for various breaches including failure to constitute a management board within RBI’s extended deadline and exceeding loan limits.
Solapur Janata Sahakari Bank, Solapur
Solapur Janata Sahakari Bank was fined ₹28.30 lakh for non-compliance with RBI directives regarding the constitution of a management board.
Mathura District Cooperative Bank, Uttar Pradesh
This bank faced a ₹1 lakh penalty for violating sections of the Banking Regulation Act, 1949, by not disposing of an immovable property within the stipulated time frame.
Conclusion: Banking Sector Scrutiny
The RBI’s stringent penalties underscore its commitment to enforcing regulatory compliance within the banking sector.
These actions serve as a reminder to financial institutions nationwide of the imperative nature of adherence to regulatory guidelines to ensure stability and integrity within the banking ecosystem.
