The Reserve Bank of India (RBI) has taken strict measures against several financial institutions for deficiencies in regulatory compliance. Monetary penalties have been imposed on four co-operative banks and a non-banking financial company (NBFC) as a result of their failure to adhere to RBI’s guidelines.
I. Shree Lodra Nagarik Sahakari Bank Ltd: ₹4.00 Lakh Penalty
- Shree Lodra Nagarik Sahakari Bank, located in Gandhinagar, Gujarat, has been slapped with a monetary penalty of ₹4.00 lakh by the RBI.
- The penalty was imposed for non-compliance with RBI’s directives on ‘Loans and advances to directors, relatives, and firms/concerns in which they are interested’ and ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’.
- The bank’s violations included:
| Sno. | Violations |
| 1. | Sanctioning a loan to a director’s relative. |
| 2. | Sanctioning loans with director’s relatives as guarantors. |
| 3. | Breaching the prudential inter-bank gross exposure limit. |
| 4. | Breaching the prudential inter-bank counterparty exposure limit. |
II. Malpur Nagarik Sahakari Bank Ltd: ₹3.50 Lakh Penalty
- Malpur Nagarik Sahakari Bank, located in Aravalli, Gujarat, incurred a monetary penalty of ₹3.50 lakh from the RBI.
- This penalty was imposed due to non-compliance with the RBI’s directives on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’.
- The bank not only breached the prudential inter-bank gross exposure limit but also violated the prudential inter-bank counterparty exposure limit.
III. Jolarpet Co-operative Urban Bank Ltd: ₹50,000 Penalty
- The Jolarpet Co-operative Urban Bank, situated in Vellore, Tamil Nadu, faced a monetary penalty of ₹50,000 by the RBI.
- The penalty was imposed for non-compliance with the RBI’s directions on ‘Board of Directors – UCBs’ in conjunction with the directives on ‘Loans and advances to directors, their relatives, and firms/concerns in which they are interested’.
- The bank extended loans to its directors and their relatives, which contravened RBI guidelines.
IV. Limbasi Urban Co-operative Bank Ltd: ₹25,000 Penalty
- Limbasi Urban Co-operative Bank, located in Kheda, Gujarat, received a monetary penalty of ₹25,000 from the RBI.
- The penalty was imposed for non-compliance with the RBI’s directives on ‘Loans and advances to directors, relatives, and firms/concerns in which they are interested’ along with the directions on ‘Loans and Advances to Directors etc. – Directors as surety/guarantors – Clarification’.
- The bank sanctioned a loan where a relative of one of its directors acted as a guarantor.
V. Early Salary Services Private Ltd: ₹3.20 Lakh Penalty
- Early Salary Services Private Limited, based in Pune, faced a monetary penalty of ₹3.20 lakh for non-compliance with specific provisions of the “Non-Banking Financial Company – Non-Systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016”.
- The RBI noted that the company failed to establish a system of internal audit for all outsourced activities.
Find More News Related to Banking