These actions on 5 coop banks are based on deficiencies in regulatory compliance
FinTech BizNews Service
Mumbai, August 1, 2024: The Reserve Bank of India (RBI) has, by separate orders in July 2024, imposed a monetary penalty on 5 Co-operative banks. These actions on the concerned 5 coop banks are based on deficiencies in regulatory compliance, as per the press releases issued by the RBI on August 1, 2024.
RBI has imposed monetary penalty on Hindusthan Co-operative Bank Limited, Mumbai; Alibag Co-operative Urban Bank, Maharashtra; Shrikrishna Co-operative Bank Limited, Umrer, Maharashtra; Nagnath Urban Co-operative Bank Limited, Hingoli, Maharashtra and Urban Co-operative Bank Ltd., Mainpuri, Uttar Pradesh.
1 The Reserve Bank of India (RBI) has, by an order dated July 24, 2024, imposed a monetary penalty of Rs4.00 lakh (Rupees Four lakh only) on The Hindusthan Co-operative Bank Limited, Mumbai, for non-compliance with certain directions issued by RBI on ‘Exposure Norms and Statutory / Other Restrictions - UCBs’, ‘Limits on exposure to single and group borrowers/parties and large exposures -UCBs’ and ‘Know Your Customer (KYC) Norms’. 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 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, RBI found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty. The bank had (i) sanctioned loans to nominal members in excess of the prescribed regulatory limit (ii) failed to adhere to single borrower exposure limit; and (iii) allotted multiple Unique Customer Identification Codes to its customers.
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. 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 July 24, 2024, imposed a monetary penalty of Rs2.00 lakh (Rupees Two lakh only) on Alibag Co-operative Urban Bank Limited, Alibag for non-compliance with certain directions issued by RBI on ‘Management of Advances-UCBs’. 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.
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 charge of sanctioning gold loans beyond prescribed regulatory limit under bullet repayment scheme was sustained, warranting imposition of monetary penalty.
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. 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 (RBl) has, by an order dated July 26, 2024, imposed a monetary penalty of Rs2.08 lakh (Rupees Two Lakh and Eight thousand only) on Shrikrishna Co-operative Bank Limited, Umrer, Maharashtra (the bank), for non-compliance with certain directions issued by RBI on ‘Loans and advances to directors, their relatives, and firms /concerns in which they are interested’. This penalty has been imposed in exercise of powers conferred on RBI under 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 charge of sanctioning director related loans (fund and non-fund based) to companies / concerns, where the directors or their relatives were interested, 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.
4 The Reserve Bank of India (RBl) has by an order dated July 26, 2024, imposed a monetary penalty of Rs1.00 lakh (Rupees One Lakh only) on Nagnath Urban Co-operative Bank Limited, Hingoli, Maharashtra (the bank), for contravention of the provisions of section 26A read with section 56 of the Banking Regulation Act, 1949 (BR Act). This penalty has been imposed in exercise of powers vested in RBI, conferred under section 47A(1)(c) read with section 46(4)(i) and section 56 of the BR Act.
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 statutory provision 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 provision of the BR Act. 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 not transferring the eligible amount to the Depositor Education and Awareness Fund within prescribed time period 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.
5 The Reserve Bank of India (RBI) has, by an order dated July 30, 2024 imposed a monetary penalty of Rs5.00 Lakh (Rupees Five Lakh only) on Urban Co-operative Bank Ltd., Mainpuri (the bank) for non-compliance with certain directions issued by RBI on ‘Investments by 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 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 breaching prudential inter-bank (gross) exposure limit and prudential inter-bank (counterparty) exposure limit 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.
