RBI imposes monetary penalty on four co-operative banks & 1 HFC. Details here

The Reserve Bank of India (RBI) has taken action against several banks and a housing finance company in Gujarat due to their failure to follow certain banking regulations.

Here’s a breakdown of the penalties imposed:

Gujarat Mercantile Co-operative Bank Ltd.

• Penalty Amount: ₹4.50 lakh

Reasons for Penalty:

• • Violation of RBI directions on deposit placement and Cash Reserve Ratio (CRR).
  • Exceeded inter-bank exposure limits.
  • Failed to maintain the minimum CRR on certain days.

Nagarik Sahakari Bank Ltd.

• Penalty Amount: ₹2.00 lakh

Reasons for Penalty:

• • Breached sections of the Banking Regulation Act, 1949.
  • Non-transfer of eligible funds to Depositor Education and Awareness Fund.
  • Granted a credit facility to an individual with a bank director’s relative as a guarantor.
  • Exceeded inter-bank exposure and counterparty exposure limits.
  • Failed to pay interest on unclaimed matured term deposits.

Makarpura Industrial Estate Co-operative Bank Ltd.

• Penalty Amount: ₹2.00 lakh

Reasons for Penalty:

• • Violation of Section 26A (2) of the Banking Regulation Act, 1949.
  • Failure to transfer eligible funds to the Depositor Education and Awareness Fund.
  • Sanctioned a loan with a bank director’s relative as a guarantor.

The Sevalia Urban Co-operative Bank Ltd.

• Penalty Amount: ₹50,000

Reason for Penalty:

• • Non-compliance with RBI directions regarding loans and advances involving bank directors and their relatives.
  • Sanctioned a loan with a director’s relative as a surety or guarantor.

West End Housing Finance Limited

• Penalty Amount: ₹1.70 lakh

Reason for Penalty:

• • Failure to follow National Housing Bank (NHB) directions on shareholding changes.
  • The company changed its shareholding without prior written permission from NHB or RBI, exceeding permitted limits.

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