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The Reserve Bank of India (RBI) has imposed monetary penalties on several co-operative banks across India for non-compliance with KYC guidelines, exposure norms, DEA fund requirements, and Credit Information Company (CIC) directions. These penalties have been imposed under Sections 47A, 46, 56 of the Banking Regulation Act, 1949 and relevant provisions of the Credit Information Companies (Regulation) Act, 2005. The actions are based on deficiencies in regulatory compliance and are not intended to affect the validity of any transactions undertaken by these banks.
Summary of Penalties:
The Jamnagar District Co-operative Bank Limited (Gujarat) – ₹4.10 lakh
Contraventions: Non-transfer of DEA Fund, inadequate risk categorization, non-updated KYC, no system for suspicious transactions, failure to report to CICs.
Inspection: NABARD, financial position as on March 31, 2022.
The Bantra Co-operative Bank Ltd., Howrah (West Bengal) – ₹30,000
Contraventions: Breach of inter-bank exposure limits, failure in periodic review of risk categorization.
Inspection: Financial position as on March 31, 2022.
Dhule and Nandurbar Jilha Sarkari Nokaranchi Sahakari Bank Ltd., Dhule (Maharashtra) – ₹1.00 lakh
Contraventions: No periodic review of risk categorization, non-updated KYC, no system to monitor/report suspicious transactions.
Inspection: Financial position as on March 31, 2021.
Ambarnath Jaihind Co-operative Bank Ltd., Ambarnath (Maharashtra) – ₹2.00 lakh
Contraventions: Failure to implement system for periodic review of account risk categories.
Inspection: Financial position as on March 31, 2021.
Nagrik Sahakari Bank Maryadit, Raipur (Chhattisgarh) – ₹4.50 lakh
Contraventions: Loans and advances in violation of operational instructions, breach of inter-bank gross and single counterparty limits, incomplete risk categorization of customers.
Inspection: Financial position as on March 31, 2021.
Background:
In each case, RBI conducted statutory inspections and risk assessments to review the financial position of the banks and compliance with regulatory directions. Notices were issued to the banks to show cause for non-compliance. After reviewing the banks’ written responses, additional submissions, and personal hearings, RBI concluded that the charges were substantiated and warranted imposition of monetary penalties.
These actions reflect RBI’s continued emphasis on strengthening governance, KYC compliance, risk management, and adherence to statutory provisions in the co-operative banking sector.
[RBI]