These actions on 4 coop banks are based on deficiencies in regulatory compliance
FinTech BizNews Service
Mumbai, 26 December, 2024: The Reserve Bank of India (RBI) has, by separate orders on 18 December 2024, imposed a monetary penalty on 4 co-operative banks. These actions on the concerned coop banks are based on deficiencies in regulatory compliance, as per the press releases issued by the RBI on 26 December, 2024.
RBI has imposed monetary penalty on Bharat Co-operative Bank Ltd., Bengaluru 3; Swami Vivekanand Sahakari Bank Niyamit, Nidagundi, Karnataka 1, Sri Basaveshwara Pattana Sahakara Bank Niyamit, Sindgi, Karnataka 1 andManjra Mahila Urban Co-operative Bank Limited, Bidar, Karnataka 50k
1 The Reserve Bank of India (RBI) has, by an order dated December 18, 2024, imposed a monetary penalty of Rs3.00 lakh (Rupees Three Lakh only) on The Bharat Co-operative Bank Ltd., Bengaluru (the bank) for non-compliance with specific directions issued by RBI under ‘Supervisory Action Framework (SAF)’. 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.
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 charge against the bank was sustained, warranting imposition of monetary penalty:
The bank had sanctioned fresh loans and advances, in non-adherence to directions under SAF, which were (a) beyond the applicable single borrower exposure limit; and (b) not backed by collateral security of term deposits/NSCs/KVPs/insurance policies.
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 December 18, 2024, imposed a monetary penalty of Rs1.00 lakh (Rupees One Lakh only) on Swami Vivekanand Sahakari Bank Niyamit, Nidagundi, Karnataka (the bank) for non-compliance with certain directions issued by RBI on ‘Exposure Norms and Statutory / Other Restrictions – UCBs’ and ‘Know Your Customer (KYC)’. 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.
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 December 18, 2024, imposed a monetary penalty of Rs1.00 lakh (Rupees One Lakh only) on Sri Basaveshwara Pattana Sahakara Bank Niyamit, Sindgi, Karnataka (the bank) for non-compliance with specific directions issued by RBI under ‘Supervisory Action Framework (SAF)’. 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.
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 charge against the bank was sustained, warranting imposition of monetary penalty:
The bank did not adhere to directions under SAF when it increased its exposure to the sector where level of NPAs were high and declared dividend without prior permission of RBI.
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 December 18, 2024, imposed a monetary penalty of Rs50,000/- (Rupees Fifty Thousand only) on Manjra Mahila Urban Co-operative Bank Limited, Bidar, Karnataka (the bank) for non-compliance with certain directions issued by RBI on ‘Know Your Customer (KYC)’. 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.
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 charge against the bank was sustained, warranting imposition of monetary penalty:
The bank had failed to upload the KYC records of customers onto Central KYC Records Registry (CKYCR) within the prescribed timeline.
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.
