RBI imposes monetary penalty on five co-operative banks. Details here | Mint
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Business News/ Industry / Banking/  RBI imposes monetary penalty on five co-operative banks. Details here
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RBI imposes monetary penalty on five co-operative banks. Details here

The Reserve Bank has imposed monetary penalties on five co-operative banks for deficiencies in regulatory compliance. These co-operative banks are: SBPP Co-operative Bank, Sahayadri Sahakari Bank, Rahimatpur Sahakari Bank, Gadhinglaj Urban Co-operative Bank and Kalyan Janata Sahakari Bank

The Reserve Bank has imposed monetary penalties on five co-operative banks for deficiencies in regulatory compliance (Photo: Mint)Premium
The Reserve Bank has imposed monetary penalties on five co-operative banks for deficiencies in regulatory compliance (Photo: Mint)

The Reserve Bank has imposed monetary penalties on five co-operative banks for deficiencies in regulatory compliance. These co-operative banks are: SBPP Co-operative Bank Ltd, The Sahayadri Sahakari Bank Ltd, Rahimatpur Sahakari Bank Ltd, The Gadhinglaj Urban Co-operative Bank Ltd and The Kalyan Janata Sahakari Bank Ltd.

The Reserve Bank imposed a monetary penalty of 13 lakh on SBPP Co-operative Bank Limited, Killa Pardi, Gujarat for non-compliance with directions issued by RBI on ‘Interest Rate on Deposits’. The penalty has been imposed in exercise of powers conferred on RBI under the provisions Banking Regulation Act, 1949. The bank had opened savings deposit accounts of trusts, whose entire income was not exempt from payment of income-tax under the Income Tax Act, 1961.

The apex bank imposed a monetary penalty of 6.00 lakh on The Sahayadri Sahakari Bank Limited, Mumbai for contravention of certain sections of the Banking Regulation Act, 1949 (BR Act), specific directions issued by RBI under the Supervisory Action Framework (SAF), and non-compliance with the RBI Directions on ‘Know Your Customer (KYC)’ and ‘Maintenance of Deposit Accounts - Primary (Urban) Co-operative Banks’.

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The Sahayadri Sahakari Bank had not transferred eligible amounts to Depositor Education and Awareness Fund (DEA Fund), and had offered interest rates on deposits at rate more than those offered by the State Bank of India in violation of specific directions issued under the SAF. The  bank had not put in place a system for periodic updation of KYC of its customers, and had not conducted annual review of inoperative/dormant accounts. It had also not conducted periodic review of risk categorisation of its high-risk customers.

The RBI imposed a monetary penalty of 1.00 lakh on Rahimatpur Sahakari Bank Ltd., Rahimatpur, Dist. Satara for non-compliance with the directions issued by RBI on ‘Maintenance of Deposit Accounts- Primary (Urban) Co-operative Banks’. The Rahimatpur Sahakari Bank Ltd., Rahimatpur had not conducted annual review of inoperative accounts.

The Reserve Bank imposed a monetary penalty of 3.00 lakh on The Gadhinglaj Urban Co-operative Bank Ltd., Gadhinglaj for contravention of certain sections of the Banking Regulation Act,1949 (BR Act) and Know Your Customer Directions issued by RBI. The penalty was imposed in exercise of powers conferred on RBI under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act. The Gadhinglaj Urban Co-operative Bank Ltd had not transfer eligible amounts to Depositor Education and Awareness Fund, and allotted multiple UCICs to its customers.

The Reserve Bank imposed a monetary penalty of 4.50 lakh on The Kalyan Janata Sahakari Bank Limited, Kalyan, Maharashtra for non-compliance with the directions issued by RBI on ‘Interest Rates on Deposits’ and ‘Maintenance of Deposit Accounts’. The Kalyan Janata Sahakari Bank had opened Savings Bank (SB) accounts of ineligible institutions, and levied charges for non-maintenance of minimum balances in SB accounts without notifying the customers.

The actions of Reserve Bank was based on deficiencies in regulatory compliance and not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with its customers.

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Published: 09 Oct 2023, 06:29 PM IST
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