These actions on 2 coop entities are based on deficiencies in regulatory compliance
FinTech BizNews Service
Mumbai, June 24, 2024: The Reserve Bank of India (RBI) has, by separate orders in June 2024, imposed a monetary penalty on 2 Co-operative banks. These actions on the concerned 2 coop banks are based on deficiencies in regulatory compliance, as per the press releases issued by the RBI on June 24, 2024.
RBI has imposed monetary penalty on Hirasugar Employees’ Co-operative Bank Limited, Belagavi, Karnataka and National Insurance Employees’ Co-operative Credit & Banking Society Limited, Kolkata.
The Reserve Bank of India (RBI) has, by an order dated June 21, 2024, imposed a monetary penalty of Rs25,000/- (Rupees Twenty-five thousand only) on The Hirasugar Employees’ Co-operative Bank Limited, Belagavi, Karnataka (the bank) for non-compliance with the directions issued by RBI on ‘Exposure Norms and Statutory/Other Restrictions − UCBs’. 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, 2022. 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 direction. 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 non-adherence to the prudential inter-bank (gross) and counter party exposure limits 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.
The Reserve Bank of India (RBI) has, by an order dated June 20, 2024, imposed a monetary penalty of Rs2,00,000/- (Rupees Two lakh only) on the National Insurance Employees’ Co-operative Credit & Banking Society Limited, Kolkata (the bank) for non-compliance with certain provisions of RBI directions on ‘Investments by Primary (Urban) Co-operative Banks’ and ‘Know your Customer (KYC) Direction, 2016’. 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, 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 (i) failed to maintain the prescribed inter-bank counter party exposure limit; and (ii) failed to implement a system of periodic review of risk categorization of accounts.
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.
