These actions on 4 coop banks are based on deficiencies in regulatory compliance
FinTech BizNews Service
Mumbai, February 13, 2024: The Reserve Bank of India (RBI) has, by separate orders in February, 2024, imposed a monetary penalty on 4 co-operative banks. These actions on 4 coop banks are based on deficiencies in regulatory compliance, as per the press releases issued by the RBI on February 12, 2024.
RBI has imposed monetary penalty on Shillong Co-operative Urban Bank Limited, Meghalaya; Pusad Urban Co-operative Bank Ltd., Pusad, Maharashtra; Sri Satya Sai Nagrik Sahakari Bank Maryadit, Bhopal, Madhya Pradesh and Anjangaon Surji Nagari Sahakari Bank Limited, Anjangaon Surji, Maharashtra
1 The Reserve Bank of India (RBI) has, by an order dated February 08, 2024, imposed a monetary penalty of Rs1.00 lakh (Rupees One lakh only) on Shillong Co-operative Urban Bank Limited, Meghalaya (the bank) for non-compliance with the directions issued by RBI on ‘Know Your Customer (KYC) Directions, 2016’. This penalty has been imposed in exercise of powers conferred on RBI under Section 47A (1) (c) read with Sections 46(4) (i) and 56 of the Banking Regulation Act, 1949.
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.
Background
The statutory inspection of the bank conducted by RBI with reference to its financial position as on March 31, 2023, and examination of the Inspection Report, Risk Assessment Report and all correspondence related thereto revealed, inter alia, that the bank had (i) failed to put in place a system of risk categorisation of accounts, and (ii) failed to undertake periodic updation of KYC of customer accounts. Consequently, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with the said directions, as stated therein.
After considering the bank’s reply to the notice, additional submissions made by it and oral submissions made during the personal hearing, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty on the bank.
2 The Reserve Bank of India (RBI) has, by an order dated February 08, 2024 imposed a monetary penalty of Rs2.50 lakh (Rupees Two lakh fifty thousand only) on Pusad Urban Co-operative Bank Ltd., Pusad, Maharashtra (the bank) for non-compliance with the directions issued by RBI on ‘Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs’. 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.
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.
Background
The statutory inspection of the bank conducted by RBI with reference to its financial position as on March 31, 2020, and examination of the Inspection Report and all correspondence related thereto revealed, inter alia, that the bank had not adhered to the Prudential Norms relating to Income Recognition, Asset Classification and Provisioning. Consequently, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for failure to comply with the said directions, as stated therein.
After considering the bank’s reply to the notice, its additional submissions and oral submissions made by it during the personal hearing, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty on the bank.
3 The Reserve Bank of India (RBl) has, by an order dated February 07, 2024, imposed a monetary penalty of Rs0.75 lakh (Rupees Seventy-Five thousand only) on Sri Satya Sai Nagrik Sahakari Bank Maryadit, Bhopal, Madhya Pradesh (the bank) for non-compliance with the directions issued by RBI on ‘Exposure Norms & Statutory/Other Restrictions - UCBs’. 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.
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.
Background
The statutory inspection of the bank conducted by RBI with reference to its financial position as on March 31, 2022, and examination of the Risk Assessment Report and all correspondence related thereto revealed, inter alia, that the bank had breached the prudential inter-bank gross and counterparty exposure limits. Consequently, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for failure to comply with the said directions, as stated therein.
After considering the bank's reply to the notice and oral submissions made by it during the personal hearing, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty on the bank.
4 The Reserve Bank of India (RBl) has imposed, by an order dated February 08, 2024, a monetary penalty of Rs0.50 lakh (Rupees Fifty thousand only) on The Anjangaon Surji Nagari Sahakari Bank Limited, Anjangaon Surji, Maharashtra (the bank) for contravention of Directives and specific directions issued by RBI under sections 35(A)(1) and 36(1) read with section 56 of the Banking Regulation Act, 1949 (BR Act), respectively. 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 BR Act.
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.
Background
The statutory inspection of the bank conducted by RBI with reference to its financial position as on March 31, 2022, and examination of the Risk Assessment Report and all correspondence related thereto revealed, inter alia, that the bank had (i) allowed withdrawal by depositors more than the limit prescribed under Directives issued by RBI under section 35A(1) read with section 56 of the Act, and (ii) disbursed fresh loans in violation of specific directions issued under Supervisory Action Framework (SAF). Consequently, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for failure to comply with the said directions, as stated therein.
After considering the bank's reply to the notice, additional submissions and oral submissions made by it during the personal hearing, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty on the bank.
