The Reserve Bank of India (RBI) has taken strict measures against two cooperative banks for violating key regulations.
While some breaches were related to Know Your Customer (KYC) guidelines, others pertained to loan-related rules.
After confirming the violations, the RBI imposed monetary penalties amounting to lakhs of rupees.
The RBI fined Mukkuperi Co-operative Urban Bank Limited in Tamil Nadu Rs. 1.75 lakh, while Parbhani District Central Cooperative Bank Limited in Maharashtra faced a penalty of Rs. 5 lakh for regulatory non-compliance.
Show Cause Notices Issued
During a statutory inspection conducted by the RBI to assess the financial health of these banks, several lapses in regulatory compliance were identified.
Following these findings, the RBI issued show cause notices to both banks.
After receiving their responses and conducting further investigations, the central bank decided to impose monetary penalties.
Reasons for the Penalties
Mukkuperi Co-operative Urban Bank Limited
This bank failed to follow directions under the Supervisory Action Framework (SAF), which increased risk in a sector already burdened by high Non-Performing Assets (NPA).
Additionally, it did not upload customers’ KYC records to the central KYC record registry within the required timeframe.
Parbhani District Central Cooperative Bank Limited
This bank violated rules by failing to approve loans related to its directors and did not transfer the eligible amount to the Depositor Education and Awareness Fund within the stipulated time.
These actions by the RBI aim to ensure stricter compliance with regulations and to maintain financial discipline in the banking sector.
