These actions on 5 coop banks are based on deficiencies in regulatory compliance
FinTech BizNews Service
Mumbai, 7 October, 2024: The Reserve Bank of India (RBI) has, by separate orders in September, 2024 and October, 2024
imposed a monetary penalty on five 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 7 October, 2024.
RBI has imposed monetary penalty on Nabapalli Co-operative Bank,Kolkata, West Bengal; Sindhudurg District Central Co-operative Bank Kolhapur; Urban Co-operative Bank Limited, Kolhapur, Maharashtra, Muslim Co-operative Bank Limited, Pune, Maharashtra and Koyana Sahakari Bank Ltd., Karad, Maharashtra.
1 The Reserve Bank of India (RBl) has, by an order dated October 03, 2024, imposed a monetary penalty of Rs1.10 lakh (Rupees One Lakh Ten Thousand only) on Nabapalli Co-operative Bank Limited (the bank) Kolkata, West Bengal, for non-compliance with specific directions issued by RBI on making contribution to Micro and Small Enterprises (MSE) Refinance Fund due to shortfall in achievement of Priority Sector Lending (PSL). 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 bank was directed by RBI through specific directions, to deposit a certain amount to MSE Refinance Fund administered by Small Industries Development Bank of India (SIDBI) against the shortfall in achievement of PSL target for the Financial Year (FY) 2022-23. On failure to deposit the prescribed amount, a cautionary letter was also issued by RBI advising the bank to deposit the requisite amount, but the bank again failed to deposit the same. Based on the above-mentioned non-compliance 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 specific 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 failure to deposit the prescribed amount to MSE Refinance Fund maintained with SIDBI against the shortfall in achievement of PSL target for FY 2022-23 within the prescribed time and even after the issuance of cautionary letter, 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.
2 The Reserve Bank of India (RBI) has, by an order dated September 25, 2024, imposed a monetary penalty of Rs2.00 lakh (Rupees Two Lakh only) on Sindhudurg District Central Co-operative Bank Limited, Maharashtra for violation of Section 20 of Banking Regulation Act, 1949 (BR Act) read with Section 56 of the Act. 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 NABARD with reference to its financial position as on March 31, 2023. Based on supervisory findings of contravention of 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 during the personal hearing, RBI found, inter alia, that the charge of sanctioning loans to its directors 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 (RBI) has, by an order dated September 30, 2024, imposed a monetary penalty of Rs2.00 lakh (Rupees Two Lakh only) on The Kolhapur Urban Co-operative Bank Limited, Kolhapur, Maharashtra 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 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, and oral submissions made during the personal hearing, RBI found, inter alia, that the charge of sanctioning director related loans 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.
4 The Reserve Bank of India (RBI) has, by an order dated September 30, 2024, imposed a monetary penalty of Rs3.00 lakh (Rupees Three Lakh only) on the Muslim Co-operative Bank Limited, Pune, Maharashtra 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 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 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.
5 The Reserve Bank of India (RBI) has, by an order dated September 26, 2024, imposed a monetary penalty of Rs2.00 lakh (Rupees Two Lakh only) on Koyana Sahakari Bank Ltd., Karad, Maharashtra (the bank) for non-compliance with certain directions issued by RBI on ‘Income Recognition, Asset Classification, Provisioning and Other Related Matters- 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 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 failure to classify certain loan accounts as non-performing asset in terms of Income recognition, Asset classification and Provisioning norms 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.
