These actions on are based on deficiencies in regulatory compliance
FinTech BizNews Service
Mumbai, December 8, 2023: The Reserve Bank of India (RBI) has, by separate orders in November, 2023, imposed a monetary penalty on each of 4 Co-operative Bank banks. These actions on 4 coop banks are based on deficiencies in regulatory compliance, as per the press releases issued by the RBI on December 7, 2023.
RBI has imposed monetary penalty on Rajarshi Shahu Sahakari Bank Ltd., Pune, Maharashtra; Prathamik Shikshak Sahakari Bank Limited, Satara, Maharashtra;
Patan Co-operative Bank Limited, Mumbai, Maharashtra and District Co-operative Central Bank Ltd., Mahabubnagar, Telangana.
1 The Reserve Bank of India (RBI) has, by an order dated November 16, 2023, imposed a monetary penalty of ?1.00 lakh (Rupees One lakh only) on Rajarshi Shahu Sahakari Bank Ltd., Pune, Maharashtra (the bank) for non-compliance with the directions issued by RBI on ‘Maintenance of Deposit Accounts - Primary (Urban) Co-operative Banks’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949.
This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
Background
The statutory inspection of the bank conducted by RBI with reference to its financial position as on March 31, 2022, and examination of the Inspection Report, Risk Assessment Report and all correspondence related thereto revealed, inter alia, that the bank had imposed fixed penal charges for shortfall in maintenance of minimum balance in savings bank accounts, instead of imposing penal charges proportionate to the extent of shortfall, and had also failed to notify its customers about the shortfall in minimum balance before levying charges. Consequently, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for failure to comply with the said directions, as stated therein.
After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty on the bank.
2 The Reserve Bank of India (RBI) has, by an order dated November 21, 2023 imposed a monetary penalty of ?1.00 lakh (Rupees One lakh only) on The Prathamik Shikshak Sahakari Bank Limited, Satara, Maharashtra (the bank) for non-compliance with the directions issued by RBI on ‘Management of Advances-UCBs’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949.
This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
Background
The statutory inspection of the bank conducted by RBI with reference to its financial position as on March 31, 2022 and examination of the Risk Assessment Report and all correspondence related thereto revealed, inter alia, that the bank had sanctioned gold loans beyond prescribed regulatory limit under bullet repayment scheme. Consequently, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for failure to comply with the said directions, as stated therein.
After considering the bank’s reply to the notice and oral submissions made by it during the personal hearing, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty on the bank.
3 The Reserve Bank of India (RBI) has, by an order dated November 17, 2023, imposed a monetary penalty of ?1.00 lakh (Rupees One lakh only) on Patan Co-operative Bank Limited, Mumbai, Maharashtra (the bank) for non-compliance with directions issued by RBI on ‘Reserve Bank of India –Know Your Customer (KYC) Direction, 2016’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47 A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949.
This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
Background
The statutory inspection of the bank conducted by RBI with reference to its financial position as on March 31, 2022, and examination of the Risk Assessment Report and all correspondence related thereto revealed, inter alia, that the bank had failed to carry out periodic review of risk categorisation of accounts. Consequently, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for failure to comply with the said directions, as stated therein.
After considering the bank’s reply to the notice and oral submissions made by it during the personal hearing, RBI came to the conclusion that the charge of non-compliance with the aforesaid directions issued by RBI was substantiated and warranted imposition of monetary penalty on the bank.
4 The Reserve Bank of India (RBI) has, by an order dated November 15, 2023, imposed a monetary penalty of ?10,000/- (Rupees Ten thousand only) on The District Co-operative Central Bank Ltd., Mahabubnagar, Telangana (the bank) for non-compliance with the directions issued by the National Bank for Agriculture and Rural Development (NABARD) on ‘Review of Frauds – Guidelines on Monitoring and Reporting System’ read with ‘Frauds - Guidelines for Classification, Reporting and Monitoring of Frauds’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47-A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949.
This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
Background
The statutory inspection of the bank conducted by NABARD with reference to its financial position as on March 31, 2022, and examination of the Inspection Report, and all correspondence related thereto revealed, inter alia, that the bank had not reported cases of fraud to NABARD within the stipulated timeline. Consequently, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with the aforesaid directions, as stated therein.
After considering the bank’s reply to the notice and oral submissions made by it during the personal hearing, RBI came to the conclusion that the charge of non-compliance with the aforesaid NABARD directions was substantiated and warranted imposition of monetary penalty on the bank.
