RBI Imposes Monetary Penalties on Four Cooperative Banks

The Reserve Bank of India (RBI) recently took action against four cooperative banks, imposing monetary penalties due to various rule violations. Below, we provide a breakdown of the penalties and the reasons behind them.

1. Baramati Sahakari Bank – Rs 2 Lakh Penalty

Violation: Failure to Credit Interest to Inoperative Savings Accounts

Baramati Sahakari Bank faced a penalty of Rs 2 lakh for failing to credit interest to inoperative savings bank accounts, a breach that prompted the RBI’s intervention.

2. Becharaji Nagarik Sahakari Bank – Rs 2 Lakh Penalty

Violation: Breach of Prudential Inter-Bank Counter-Party Exposure Limits

Becharaji Nagarik Sahakari Bank incurred a penalty of Rs 2 lakh for exceeding prudential inter-bank counter-party exposure limits, a violation of banking regulations.

3. Waghodia Urban Co-operative Bank – Rs 5 Lakh Penalty

Violations:

• Breach of Prudential Inter-Bank Counter-Party Exposure Limits
• Non-Payment of Interest on Recurring Deposits and Term Deposits

The Waghodia Urban Co-operative Bank faced a substantial penalty of Rs 5 lakh for several infractions. This includes sanctioning credit facilities to individuals where relatives of its directors acted as guarantors, leading to a breach of prudential inter-bank counter-party exposure limits.

Furthermore, the bank failed to pay interest on matured recurring deposits from the date of maturity until the date of repayment, at the rate applicable to savings deposits or at the contracted rate of interest, whichever was lower. It also neglected to pay interest on term deposits for Sundays, holidays, or non-business working days, repaying them on the succeeding working days.

4. Viramgam Mercantile Co-operative Bank – Rs 5 Lakh Penalty

Violation: Not Specified in the Release

While the RBI imposed a penalty of Rs 5 lakh on the Viramgam Mercantile Co-operative Bank, the specific violation leading to this penalty was not detailed in the release.

Find More News Related to Banking