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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

RBI has imposed monetary penalties on 5 cooperative banks for deficiencies in regulatory compliance. These banks are: Patliputra Central Cooperative Bank, Patan Nagarik Sahakari Bank, Mandal Nagarik Sahakari Bank, Balasore Bhadrak Central Cooperative Bank and Dhrangadhra People’s Cooperative Bank

RBI imposes monetary penalty on five co-operative banksPremium
RBI imposes monetary penalty on five co-operative banks

The Reserve Bank has imposed monetary penalties on five co-operative banks for deficiencies in regulatory compliance. These co-operative banks are: The Patliputra Central Cooperative Bank Ltd, Patan Nagarik Sahakari Bank Ltd, The Mandal Nagarik Sahakari Bank Ltd, The Balasore Bhadrak Central Co-operative Bank Ltd, the Dhrangadhra People’s Co-operative Bank Ltd

The Reserve Bank imposed a monetary penalty of 1.50 lakh on the Patliputra Central Cooperative Bank Ltd, Bihar for non-compliance with the directions issued by RBI on ‘The Depositor Education and Awareness Fund Scheme, 2014 – Section 26A of Banking Regulation Act, 1949 - Operational Guidelines’ and ‘Reserve Bank of India – (Know Your Customer (KYC)) Directions, 2016’.

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The apex bank said the Patliputra Central Cooperative Bank had not transferred eligible amounts to the Depositor Education and Awareness Fund. The bank had also not classified its customers into various risk categories (low, medium and high), and also not put in place a system of periodic updation of KYC, the RBI added.

The Reserve Bank imposed a monetary penalty of 1.50 lakh on Patan Nagarik Sahakari Bank Ltd., Patan, Gujarat for non-compliance with the directions issued by RBI on ‘Loans and advances to directors, relatives and firms/concerns in which they are Interested’ read with ‘Loans and Advances to directors etc. - directors as surety/guarantors – Clarification’ and ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’. The RBI said the Patan Nagarik Sahakari Bank had sanctioned a loan where a relative of one of the directors of the bank stood as guarantor; and breached the prudential inter-bank counterparty exposure limit.

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The banking regulator has imposed a monetary penalty of 1.50 Lakh on the Mandal Nagarik Sahakari Bank Ltd., Mandal, Dist. Ahmedabad, Gujarat for non-compliance with the directions issued by RBI on ‘Loans and advances to directors, relatives and firms/concerns in which they are interested’ read with ‘Loans and Advances to Directors etc. - Directors as surety/guarantors – Clarification’ and ‘Co-operative Banks - Interest Rate on Deposits’.

The RBI said the Mandal Nagarik Sahakari Bank had sanctioned loans where a relative of one of the directors of the bank stood as guarantor, and not paid interest at the applicable rate on term deposits which matured on a Sunday / holiday / non-business working day, and were paid on the succeeding working days.

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The bank also not paid interest on deposits withdrawn before their maturity for the period deposits remained with the bank and on matured overdue term deposits from the date of maturity till the date of their repayment.

The Reserve Bank imposed a monetary penalty of 50,000/- on the Balasore Bhadrak Central Co-operative Bank Ltd., Balasore for non-compliance with the directions issued by RBI on “Membership of Credit Information Companies (CICs)". The RBI said the Balasore Bhadrak Central Co-operative Bank had failed to upload credit information to Credit Information Companies.

The RBI has imposed a monetary penalty of 1.00 lakh on the Dhrangadhra People’s Co-operative Bank Ltd., Dhrangadhra, Dist. Surendranagar, Gujarat for non-compliance with the directions issued by RBI on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’. The apex bank said the Dhrangadhra People’s Co-operative Bank had breached the inter-bank counterparty exposure limit. 

The RBI further said the monetary penalties on the cooperative banks were based on deficiencies in regulatory compliance and were 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: 30 Nov 2023, 06:33 PM IST
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