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

The Reserve Bank (RBI) has imposed monetary penalties on four co-operative banks for deficiencies in regulatory compliance. These co-operative banks are: Lalbaug Co-operative Bank Ltd, The Co-operative Bank of Mehsana Ltd, The Harij Nagrik Sahakari Bank Ltd and The National Co-operative Bank Ltd.

RBI imposes monetary penalty on four co-operative banks (Photo: Mint)Premium
RBI imposes monetary penalty on four co-operative banks (Photo: Mint)

The Reserve Bank has imposed monetary penalties on four co-operative banks for deficiencies in regulatory compliance. These co-operative banks are: Lalbaug Co-operative Bank Ltd, The Co-operative Bank of Mehsana Ltd, The Harij Nagrik Sahakari Bank Ltd and The National Co-operative Bank Ltd.

The Reserve Bank imposed a monetary penalty of 5.00 lakh on Lalbaug Co-operative Bank Ltd., Vadodara, Gujarat for non-compliance with the directions issued by RBI on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’ and ‘Reserve Bank of India (Co-operative Banks - Interest Rate on Deposits) Directions, 2016’.

The RBI said the bank had not only breached prudential inter-bank (gross) exposure limit, but also breached prudential inter-bank counter-party exposure limit, and failed to pay interest on overdue recurring and term deposits from the date of maturity till the date of repayment at the applicable rate.

A monetary penalty of 3.50 lakh was imposed on The Co-operative Bank of Mehsana Ltd., Mehsana, Gujarat for non-compliance with the directions issued by RBI on ‘Loans and Advances to directors, relatives and firms or concerns in which they are Interested’ read with ‘Loans and Advances to Directors etc. - Directors as surety or guarantors – Clarification’ and ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’.

The bank had sanctioned loans where relative of one of the directors of the bank stood as guarantor, and had also breached inter-bank counterparty exposure limit, the banking regulator said.

The apex bank imposed a monetary penalty of 3.00 Lakh on The Harij Nagrik Sahakari Bank Ltd., Harij, Gujarat for non-compliance with the directions issued by RBI on ‘Maintenance of Cash Reserve Ratio (CRR)’, ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’, and ‘Interest Rate on Deposits - Directions, 2016’.

The RBI said the bank had failed to maintain minimum Cash Reserve Ratio (CRR) for few days, and breached inter-bank counter-party exposure limit. RBI further said the bank failed to make payment of applicable interest on deposits lying in the current accounts of deceased individual depositors or sole proprietorship concerns.

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

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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Updated: 19 Sep 2023, 08:25 PM IST
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