These actions on 4 coop banks are based on deficiencies in regulatory compliance
FinTech BizNews Service
Mumbai, January 30, 2025: The RBI, by separate orders in January 2025, has imposed a monetary penalty on each of 4 cooperative banks. These actions on the concerned coop banks are based on deficiencies in regulatory compliance, as per the press release issued by the RBI today.
RBI has imposed monetary penalty on Shree Savli Nagrik Sahakari Bank Ltd., Dist. Vadodara, Gujarat (Rs2.10 lakh); Kosamba Mercantile Co-operative Bank Ltd., Dist. Surat, Gujarat (Rs2.00 lakh); Vadali Nagarik Sahakari Bank, Dist. Sabarkantha, Gujarat (Rs2.00 lakh) and Odisha State Co-operative Bank (Rs4.00 lakh).
1 The Reserve Bank of India (RBI) has, by an order dated January 27, 2025, imposed a monetary penalty of Rs2.10 lakh (Rupees Two Lakh Ten Thousand only) on Shree Savli Nagrik Sahakari Bank Ltd., Dist. Vadodara, Gujarat (the bank) for contravention of provisions of Section 26A read with Section 56 of the Banking Regulation Act, 1949 (BR Act) and for non-compliance with certain directions issued by RBI on ‘Investment by Primary (Urban) Co-operative Banks’, ‘Know Your Customer (KYC)’ and ‘Membership of Credit Information Companies (CICs) by 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 BR Act and Section 25 of the Credit Information Companies (Regulation) Act, 2005.
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 contravention of statutory provisions/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 provisions and directions. 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 charges against the bank were sustained, warranting imposition of monetary penalty:
The bank had:
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.
2 The Reserve Bank of India (RBI) has, by an order dated January 28, 2025, imposed a monetary penalty of Rs2.00 lakh (Rupees Two Lakh only) on The Kosamba Mercantile Co-operative Bank Ltd., Dist. Surat, Gujarat (the bank) for non-compliance with certain directions issued by RBI on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks’ and ‘Know Your Customer (KYC)’. This penalty has been imposed in exercise of powers conferred in RBI under 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 during the personal hearing, RBI found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty:
The bank had failed to:
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.
3 The Reserve Bank of India (RBI) has, by an order dated January 28, 2025, imposed a monetary penalty of Rs2.00 lakh (Rupees Two Lakh only) on The Vadali Nagarik Sahakari Bank Ltd., Dist. Sabarkantha, Gujarat (the bank) for non-compliance with certain directions issued by RBI on ‘Loans and Advances to directors, relatives and firms/concerns in which they are Interested’; ‘Placement of deposits with other banks by Primary (Urban) Co-operative Banks’ and ‘Know Your Customer (KYC)’. This penalty has been imposed in exercise of powers conferred in RBI under 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 during the personal hearing, RBI found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty:
The bank had:
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.
4 The Reserve Bank of India (RBI) has, by an order dated January 28, 2025, imposed a monetary penalty of Rs4.00 lakh (Rupees Four Lakh only) on The Odisha State Co-operative Bank Ltd., (the bank) for non-compliance with the provisions of Section 9 and Section 26A of the Banking Regulation Act, 1949 (BR Act). This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) and 56 of BR Act.
The statutory inspection of the bank was conducted by the National Bank for Agriculture and Rural Development (NABARD) with reference to its financial position as on March 31, 2023. Based on supervisory findings of contravention of statutory provisions 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 contravention of provisions of the BR Act. After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty:
The bank had:
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.
