RBI Imposed Penalty: Reserve Bank of India has imposed a penalty of up to Rs 60 lakh on 10 banks. Is your bank involved in this? In this topic we will see why this fine was imposed and what its consequences could be. The Reserve Bank has imposed a fine of up to Rs 60 lakh on 10 co-operative banks. All these banks are co-operative banks.
RBI Imposed fine
According to the Reserve Bank, these banks have been fined for affecting the validity of the transactions and agreements made with their customers. A fine of up to Rs 60 lakh has been imposed on 10 banks of the country. These banks have been fined for not following various regulatory guidelines. All these banks are co-operative banks and their operations are at the local level.
Reserve Bank imposed fine on 10 banks (RBI Imposed fine)
RBI had taken this step on these banks on 26 and 27 March. Its main purpose is not to affect the validity of the transactions or agreements entered into with the customers of banks.
1. Howrah District Central Co-operative Bank, Howrah
RBI has imposed a fine of Rs 1 lakh on Howrah District Central Co-operative Bank, Howrah (West Bengal). This action has been taken due to non-compliance of KYC guidelines of the central bank. The bank did not update KYC details regularly, which showed lack of systematic approach in risk categorization of accounts. Therefore, National Bank for Agriculture and Rural Development (NABARD) inspected its financial position.
2. Excellent Co-operative Bank, Mumbai (Maharashtra)
Mumbai-based Excellent Co-operative Bank Ltd has been fined Rs 1 lakh for violating Depositor Education and Awareness Fund norms. The bank did not transfer the required amount to the fund within the stipulated time limit. RBI had conducted a statutory inspection of the financial position of the bank till March 31, 2023.
3. Standard Urban Co-operative Bank, Aurangabad (Maharashtra)
RBI has imposed a fine of Rs 50,000 on Standard Urban Co-operative Bank Limited. This is because the earmarked amount was not transferred to the Depositor Education and Awareness Fund, as required by banking rules. RBI had inspected the financial position of the bank as on March 31, 2022 for the validity of it.
4. Rajapalayam Co-operative Urban Bank, Rajapalayam
Rajapalayam Co-operative Urban Bank Ltd has been fined Rs 75,000 by the RBI for non-compliance with directions regarding loans and advances given to directors, their relatives and their associated companies. The bank gave loans to relatives of directors and sanctioned loans to nominal members in excess of the prescribed limit. RBI had conducted a statutory inspection regarding the financial position of the bank till March 31, 2022.
5. Mandi Urban Co-operative Bank, Himachal Pradesh
The Reserve Bank of India has imposed a fine of Rs 6 lakh on Mandi Urban Co-operative Bank Limited, a bank based in Mandi, Himachal Pradesh. This penalty has been imposed for violation of prudential interbank exposure limits on gross and counterparty basis. RBI had inspected the financial position of the bank till March 31, 2022.
6. Chikkamagaluru, Karnataka
RBI has imposed a fine of Rs 50,000 on Chikkamagaluru District Co-operative Central Bank Limited, Chikkamagaluru, Karnataka. This step has been taken for non-compliance of ‘Frauds-Guidelines for Classification, Reporting and Monitoring’ under the instructions of NABARD. The bank did not inform NABARD on time of reporting the frauds. The financial position of the bank till March 31, 2023 was inspected by NABARD.
7. Dindigul Urban Co-operative Bank Limited, Tamil Nadu
RBI has imposed a penalty of Rs 25,000 on Dindigul Urban Co-operative Bank Limited, Dindigul, Tamil Nadu. This exposure is for non-compliance with the Central Bank’s instructions on Exposure Norms and Statutory/Other Restrictions – UCBs. The bank sanctioned loans to nominal members in excess of the prescribed limit. The statutory inspection of the financial position of the bank till March 31, 2022 was done by RBI.
8. Janalakshmi Co-operative Bank, Nashik
The Reserve Bank has imposed a fine of up to Rs 59.90 lakh on Nashik-based Janalakshmi Co-operative Bank. This exposure is for non-compliance with instructions under the Norms and Supervisory Action Framework. The RBI investigation found that the bank failed to constitute the management board within the deadline, extended loans to nominal members in excess of the prescribed limit, and opened/renewed term deposits at higher interest rates.
9. Solapur Janata Sahakari Bank, Solapur
RBI has imposed a fine of Rs 28.30 lakh on Solapur Janata Sahakari Bank. The bank did not follow the instructions of RBI, hence this penalty has been imposed. The financial position of the bank was examined by the RBI.
10. Mathura District Cooperative Bank, Uttar Pradesh
RBI has imposed a fine of Rs 1 lakh on Mathura District Cooperative Bank for non-compliance of certain sections of the Banking Regulation Act, 1949. The bank did not settle an immovable property within the stipulated time, which should have been within the period allowed by law. The bank was not using this property for its own purposes.