These actions on 5 coop banks are based on deficiencies in regulatory compliance
FinTech BizNews Service
Mumbai, 18 November, 2024: The Reserve Bank of India (RBI) has, by separate orders on November 12 and November 13, 2024, imposed a monetary penalty on each of 5 co-operative banks. These actions on the concerned five coop banks are based on deficiencies in regulatory compliance, as per the press releases issued by the RBI on November 18, 2024.
RBI has imposed monetary penalty on Nawadah Central Co-operative Bank, Bihar; National Central Co-operative Bank Ltd., Bettiah, Bihar; Vepar Udhyog Vikas Sahakari Bank Limited, Dist. Dahod, Gujarat; Mansa Nagarik Sahakari Bank Ltd., Dist. Gandhinagar, Gujarat and M.S. Co-operative Bank Ltd., Vadodara, Gujarat.
1 The Reserve Bank of India (RBI) has, by an order dated November 13, 2024, imposed a monetary penalty of Rs1.25 lakh (Rupees One Lakh Twenty Five Thousand only) on The Nawadah Central Co-operative Bank Ltd., Bihar (the bank) for non-compliance with certain directions issued by RBI on ‘Membership of Credit Information Companies (CICs) by Co-operative Banks’ and ‘Know Your Customer (KYC)’. 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 and section 25 of the Credit Information Companies (Regulation) Act, 2005.
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 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 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.
2 The Reserve Bank of India (RBI) has, by an order dated November 13, 2024, imposed a monetary penalty of Rs4.10 lakh (Rupees Four Lakh Ten Thousand only) on The National Central Co-operative Bank Ltd., Bettiah, Bihar (the bank) for contravention of provisions of section 26A read with section 56 of the Banking Regulation Act, 1949 (BR Act) and non – compliance with certain directions issued by RBI on ‘Membership of Credit Information Companies (CICs) by Co-operative Banks’ and ‘Master Direction - Know Your Customer (KYC) Direction, 2016’. This penalty has been imposed in exercise of powers vested in RBI, conferred under 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 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 provision / 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 / 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 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 November 12, 2024, imposed a monetary penalty of Rs1.50 lakh (Rupees One Lakh Fifty Thousand only) on The Vepar Udhyog Vikas Sahakari Bank Limited, Dist. Dahod, Gujarat (the bank) for non-compliance with certain directions issued by RBI on ‘Maintenance of Cash Reserve Ratio (CRR)’ and ‘Know Your Customer (KYC) norms’. 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 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.
4 The Reserve Bank of India (RBI) has, by an order dated November 12, 2024, imposed a monetary penalty of Rs50,000 (Rupees Fifty Thousand only) on The Mansa Nagarik Sahakari Bank Ltd., Dist. Gandhinagar, Gujarat (the bank) for non-compliance with certain directions issued by RBI on ‘Interest Rate on Deposits’. 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 following charge against the bank was sustained, warranting imposition of monetary penalty:
The bank had failed to pay the applicable interest on certain term deposits, which remained unclaimed after maturity, from the date of maturity till the date of their repayment.
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.
5 The Reserve Bank of India (RBI) has, by an order dated November 12, 2024, imposed a monetary penalty of Rs1.50 lakh (Rupees One Lakh Fifty Thousand only) on M.S. Co-operative Bank Ltd., Vadodara, Gujarat (the bank) for non-compliance with certain directions issued by RBI on ‘Interest Rate on Deposits’ and ‘Know Your Customer (KYC)’. 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 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.
