RBI Imposes Monetary Penalties on 5 Co-operative Banks

The Reserve Bank of India (RBI) has taken action against five co-operative banks for various rule violations. These penalties are imposed based on regulatory compliance shortcomings and do not question the validity of the banks’ transactions with customers.

Penalties Imposed

Navsarjan Industrial Co-operative Bank Ltd:

• Monetary penalty: ₹7 lakh
• Reason: Non-compliance with RBI directions on deposit placement, KYC norms, and Banking Regulation Act, 1949.
• Breach: Inter-bank exposure limits, risk categorisation review, non-transfer of funds to Depositor Education and Awareness Fund.

Mehsana Jilla Panchayat Karmachari Co-operative Bank:

• Monetary penalty: ₹3 lakh
• Reason: Violation of RBI directives on deposit placement and Banking Regulation Act, 1949.
• Breach: Prudential inter-bank counterparty exposure limit, non-transfer of funds to Depositor Education and Awareness Fund.

Halol Urban Co-operative Bank:

• Monetary penalty: ₹2 lakh
• Reason: Non-compliance with RBI guidelines on loans to directors and deposit placement.
• Breach: Loans to directors, relatives, and firms of interest.

Stambhadri Co-operative Urban Bank:

• Monetary penalty: ₹50,000
• Reason: Failure to comply with RBI directives on loans to directors and relatives.
• Breach: Extending loans to directors and their relatives.

Subramanianagar Co-operative Urban Bank:

• Monetary penalty: ₹25,000
• Reason: Non-compliance with RBI directives on loans to directors and relatives.
• Breach: Extending loans to relatives of directors.

These penalties are enforced under the powers vested in the RBI by the Banking Regulation Act, 1949.