The Reserve Bank of India (RBI) said on Thursday that it has imposed a penalty on five co-operative banks for violation of certain rules.
The banks slapped with the penalty include Bassein Catholic Co-operative Bank, Tirumangalam Co-operative Urban Bank, The Tirupattur Urban Co-operative Bank, Nagpur Nagarik Sahakari Bank, and The Himachal Pradesh State Co-operative Bank.
RBI imposed Rs 61.60 lakh on Bassein Catholic Co-operative Bank, while it has levied Rs 28.30 lakh and Rs 5 lakh on Nagpur Nagarik Sahakari Bank and The Himachal Pradesh State Co-operative Bank. Tirumangalam Co-operative Urban Bank and The Tirupattur Urban Co-operative Bank have been slapped with a penalty of Rs 25,000 each.
According to the RBI, Bassein Catholic Co-operative Bank has been fined as the bank reported frauds with delay, failed to conduct periodic review of risk categorization of accounts during FY 2021-22, levied penal charges for non-maintenance of minimum balances in dormant/inoperative savings bank and current deposit accounts, and restructured credit facilities without establishing the financial viability and reasonable certainty of repayment by the borrowers.
The RBI said, “The Reserve Bank of India (RBI) has, by an order dated March 28, 2024, imposed a monetary penalty of ₹61,60,000/- (Rupees Sixty-One Lakh and Sixty Thousand only) on Bassein Catholic Co-operative Bank Ltd. (the bank) for non-compliance with RBI directions on ‘Frauds in UCBs: Changes in Monitoring and Reporting mechanism’, ‘Know Your Customer (KYC)’, ‘Maintenance of Deposit Accounts’ and ‘Management of Advances’. This penalty has been imposed in exercise of powers vested in RBI, conferred under the provisions of section 47A(1)(c) read with section 46(4)(i) and section 56 of the Banking Regulation Act, 1949.”
Nagpur Nagarik Sahakari Bank was fined because according to the RBI, the bank “had not paid interest on, original principal deposit amounts, for the Sundays/ holidays/ non-business working days on which certain term deposits had matured, while making payment of the proceeds of those deposits on the succeeding working day, balances lying in certain current accounts of deceased individual depositors/sole proprietorship concerns, from the date of their death till the date of repayment of such balances to their claimants, certain matured term deposits, at the rate applicable to savings deposits, for the period they remained unclaimed after maturity while making repayment of such deposits, and the bank did not undertake periodic review of risk categorization of accounts of its customers, at least once in six months,” said the RBI press release.
Read Also: RBI MPC Meet FY25: RBI Unlikely To Announce Rate Cuts Soon
The Reserve Bank of India has imposed a monetary penalty of Rs 25,000 on Tirumangalam Co-operative Urban Bank Ltd., Tirumangalam, Tamil Nadu for non-compliance with RBI directions on ‘Board of Directors – UCBs’ read with ‘Loans and advances to directors, their relatives, and firms/concerns in which they are interested’.
The RBI has fined Tirupattur Urban Co-operative Bank Ltd., Tirupattur, Tamil Nadu for non-compliance with certain provisions of RBI directions on ‘Exposure Norms and Statutory/ Other Restrictions – UCBs’.
Meanwhile, a monetary penalty of Rs 5.00 lakh has been imposed on The Himachal Pradesh State Co-operative Bank Limited, Shimla for contravention of the provisions of section 26 A (2) read with section 56 of the Banking Regulation Act, 1949 (BR Act).
