RBI Imposes Monetary Penalty On These Four Co-Operative Banks; Here's Why
These penalties were levied per the powers provided by the RBI under Section 47A(1)(c), read with Sections 46(4)(i) and 56 of the Banking Regulation Act of 1949.
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The Reserve Bank of India (RBI) has imposed monetary penalties on four cooperative banks and one sahakari bank for regulatory lapses.
The banks penalised by the RBI are: the Tiruppur Co-operative Urban Bank, the Ramanathapuram Co-operative Urban Bank, the Salem Urban Co-operative Bank, the Mumbai Mahanagarpalika Shikshan Vibhag Sahakari Bank and Sulaimani Co-operative Bank.
These penalties were levied per the powers provided by the RBI under Section 47A(1)(c), read with Sections 46(4)(i) and 56 of the Banking Regulation Act of 1949.
The Salem Urban Cooperative Bank Ltd. in Tamil Nadu has been fined Rs 1.75 lakh for failing to comply with exposure norms, KYC guidelines and loans and advances to directors, their relatives, and firms.
The Ramanathapuram Co-operative Urban Bank Ltd, Tamil Nadu, has been fined Rs 50,000 for non-compliance with certain directions on KYC directives.
The Tiruppur Co-operative Urban Bank Ltd. faced a penalty of Rs 1.5 lakh for violating exposure norms and KYC regulations.
The Sulaimani Co-operative Bank Ltd, Vadodara, Gujarat, has been fined Rs 2 lakh for failing to comply with RBI guidelines on placements of deposits with other banks and interest rates.
Further, RBI imposed a monetary penalty of Rs 50,000 on the Mumbai Mahanagarpalika Shikshan Vibhag Sahakari Bank Ltd., Mumbai, for non-compliance with KYC guidelines.
RBI conducted statutory inspections of the banks based on their financial situation as of March 31, 2023.
In its efforts to ensure regulatory compliance, the RBI on Feb. 13 barred New India Co-operative Bank Limited, Mumbai, from carrying out financial transactions with prior approval of the central bank.
"The bank shall not, without prior approval of RBI in writing, grant or renew any loans and advances, make any investment, incur any liability including borrowal of funds and acceptance of fresh deposits, disburse or agree to disburse any payment whether in discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets except as notified in the RBI Direction dated February 13, 2025," RBI said in a notification.
