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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 various regulatory directions and statutory provisions under the Banking Regulation Act, 1949. These penalties are based on supervisory inspections conducted with reference to the banks’ financial positions as on March 31, 2023, and are aimed at ensuring adherence to regulatory norms.
Key Penalties Imposed
Maharashtra Nagari Sahakari Bank Ltd., Latur, Maharashtra – ₹2 lakh for non-compliance with Income Recognition and Asset Classification (IRAC) norms and contravention of Section 26A read with Section 56 of the BR Act, including failure to classify certain loan accounts as NPA and delays in transferring eligible amounts to the Depositors Education and Awareness Fund.
The Nashik Jilha Mahila Sahakari Bank Ltd., Nashik, Maharashtra – ₹50,000 for contravention of Section 26A(2) read with Section 56 of the BR Act, specifically for not transferring the eligible amount to the Depositor Education and Awareness Fund within the prescribed time period.
Shikshak Sahakari Bank Ltd., Nagpur – ₹25 lakh for non-compliance with RBI directions on limits on exposure to single and group borrowers, including renewing credit facilities beyond the prescribed prudential exposure limits.
The Co-operative Bank of Rajkot Ltd., Rajkot, Gujarat – ₹8 lakh for non-compliance with directions on interest rates on deposits and KYC norms, including maintaining accounts without proper risk-based periodic KYC updates and exempting certain accounts incorrectly from income-tax obligations.
The Gandhidham Mercantile Co-operative Bank Ltd., Kachchh, Gujarat – ₹1 lakh for non-compliance with directions on donations to trusts or institutions where directors or their relatives hold positions or have interest.
RBI clarified that these actions are based strictly on deficiencies in regulatory compliance and are not intended to affect the validity of any transaction or agreement between the banks and their customers. The imposition of these monetary penalties is also without prejudice to any other action that RBI may initiate against the respective banks.
[RBI]