RBI actions on these 3 banks are based on deficiency in regulatory compliance
RBI has imposed fines on Bharati Sahakari Bank Limited, Pune; Greater Bombay Co-operative Bank Limited, Mumbai and Gandhinagar Urban Co-operative Bank Ltd., Gujarat
The action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of agreement entered into with its customers
FinTech BizNews Service
Mumbai, May 28, 2024: The Reserve Bank of India (RBI) has, by separate order in May 2024, imposed a monetary penalty on 3 co-operative banks. The RBI actions on these 3 banks are based on deficiency in regulatory compliance. RBI has imposed fines on Bharati Sahakari Bank Limited, Pune; Greater Bombay Co-operative Bank Limited, Mumbai and Gandhinagar Urban Co-operative Bank Ltd., Gujarat
1 The Reserve Bank of India (RBI) has, by an order dated May 24, 2024, imposed a monetary penalty of Rs20.00 lakh (Rupees Twenty Lakh only) on Bharati Sahakari Bank Limited, Pune (the bank) for non-compliance with certain directions issued by RBI on ‘Frauds monitoring and reporting mechanism’. This penalty has been imposed in exercise of powers vested in RBI, conferred under the provisions of section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
The Statutory Inspection for Supervisory Evaluation of the bank was conducted by RBI with reference to its financial position as on March 31, 2022. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the instructions. After considering the bank’s reply to the notice, oral submissions made during the personal hearing and examination of additional submissions made by it, RBI found, inter alia, that the following charge against the bank was sustained, warranting imposition of monetary penalty. The bank had delayed reporting of a fraud in a current account to RBI.
This action is based on deficiency 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. Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
2 The Reserve Bank of India (RBI) has, by an order dated May 22, 2024, imposed a monetary penalty of Rs25.00 lakh (Rupees Twenty Five Lakh only) on The Greater Bombay Co-operative Bank Limited, Mumbai (the bank) for non-compliance with certain directions issued by RBI on ‘Maintenance of Deposit Accounts – Primary (Urban) Co-operative Banks’. This penalty has been imposed in exercise of powers vested in RBI, conferred under the provisions of section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
The Statutory Inspection for Supervisory Evaluation of the bank was conducted by RBI with reference to its financial position as on March 31, 2022. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the directions. After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the following charge against the bank was sustained, warranting imposition of monetary penalty. The bank had levied and recovered charges at flat rate, from savings bank deposit accounts, for non-maintenance of minimum balance, instead of the charges being directly proportionate to the extent of difference between the actual balance maintained and the minimum balance as agreed upon at the time of opening of account.
The action is based on deficiency 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. Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
3 The Reserve Bank of India (RBI) has, by an order dated May 22, 2024, imposed a monetary penalty of Rs1.00 lakh (Rupees One lakh only) on The Gandhinagar Urban Co-operative Bank Ltd., Gandhinagar, Gujarat (the bank) for non-compliance with the directions issued by RBI on ‘Loans and Advances to directors, relatives and firms/concerns in which they are Interested’ read with ‘Loans and Advances to directors etc. - directors as surety/guarantors – Clarification’. This penalty has been imposed in exercise of powers vested in RBI, conferred under the provisions of section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
The statutory inspection of the bank was conducted by RBI with reference to its financial position as on March 31, 2023. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions.
After considering the bank’s reply to the notice and oral submissions made by it during the personal hearing, RBI found, inter alia, that the charge of sanctioning/renewal of loans wherein relatives of its directors stood as guarantors was sustained, warranting imposition of monetary penalty.
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. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
