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The Reserve Bank of India has imposed monetary penalties on several financial institutions for violations relating to governance, regulatory compliance, and oversight responsibilities. These actions reflect the central bank’s continuing efforts to strengthen accountability, transparency, and risk controls across the financial sector, particularly in an environment where digital operations, privacy obligations and cybersecurity risks are increasingly intertwined with compliance standards.
Governance Failure at GoCapital Finance Limited
GoCapital Finance Limited, Chennai, has been penalised for failing to obtain prior written approval from the RBI before effecting a significant change in its board structure. The company’s decision to change more than 30 percent of its directors without due authorization breached the Non-Banking Financial Company regulatory framework. The penalty underscores the RBI’s focus on governance integrity, responsible management transitions and the broader implications such lapses may have on customer trust and operational stability.
Lapses in Handling Unclaimed Deposits at Jila Sahakari Kendriya Bank
The Jila Sahakari Kendriya Bank Maryadit in Mandsaur, Madhya Pradesh, was found to have failed in transferring eligible unclaimed deposits to the Depositor Education and Awareness Fund within the mandated timeframe. Timely handling of dormant and unclaimed funds is an important element of depositor protection and financial transparency. The penalty highlights the regulatory expectation that institutions maintain accurate records and uphold statutory responsibilities that safeguard customer interests.
Violation of Supervisory Directions by The Kottarakara Co-operative Urban Bank
The Kottarakara Co-operative Urban Bank in Kerala faced a monetary penalty for disregarding restrictions placed under the Supervisory Action Framework. The bank had sanctioned and renewed credit facilities in high-risk, high-default sectors despite explicit instructions to exercise caution. Such actions expose the institution to elevated credit risk and weaken financial resilience. The RBI’s action reinforces the importance of adhering to supervisory controls, especially when risk levels are elevated.
Compliance Breaches at The Catholic Co-operative Urban Bank
The Catholic Co-operative Urban Bank Limited in Telangana was penalised for violations related to deposit account management and the sanctioning of credit to individuals connected to its board. The failure to monitor certain deposit accounts, issuing balance confirmations without actual balances, and granting loans to relatives of a director point to weaknesses in internal controls, ethical conduct and customer data oversight. These issues directly intersect with cybersecurity, privacy responsibilities and financial governance.
[RBI]