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

The Reserve Bank has imposed monetary penalties on four co-operative banks. The co-operative banks are: Shree Lodra Nagarik Sahakari Bank Ltd, Malpur Nagarik Sahakari Bank Ltd, Jolarpet Co-operative Urban Bank Ltd and Limbasi Urban Co-operative Bank

The actions of the RBI 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 co-operative banksPremium
The actions of the RBI 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 co-operative banks

The Reserve Bank has imposed monetary penalties on four co-operative banks and a non-banking financial company (NBFC) for deficiencies in regulatory compliance. The co-operative banks are: Shree Lodra Nagarik Sahakari Bank Ltd, Malpur Nagarik Sahakari Bank Ltd, Jolarpet Co-operative Urban Bank Ltd, Limbasi Urban Co-operative Bank and the NBFC is Early Salary Services Private Ltd.

The Reserve Bank imposed a monetary penalty of 4.00 lakh on Shree Lodra Nagarik Sahakari Bank Limited, Lodra, Dist. Gandhinagar, 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’ and ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’.

The apex bank said the Shree Lodra Nagarik Sahakari Bank had (i) sanctioned a loan to a relative of one of its directors; (ii) sanctioned loans wherein relatives of its directors stood as guarantors; (iii) breached the prudential inter-bank gross exposure limit; and (iv) breached the prudential inter-bank counterparty exposure limit.

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The RBI imposed a monetary penalty of 3.50 lakh on Malpur Nagarik Sahakari Bank Limited, Malpur, Dist. Aravalli, 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 RBI said the Malpur Nagarik Sahakari Bank had not only breached the prudential inter-bank gross exposure limit but also breached the prudential inter-bank counterparty exposure limit.

The Reserve Bank imposed a monetary penalty of 50,000 on the Jolarpet Co-operative Urban Bank Limited, Dist. Vellore, Tamil Nadu for non-compliance with the directions issued by RBI on ‘Board of Directors - UCBs’ read with the directions issued by RBI on ‘Loans and advances to directors, their relatives, and firms/concerns in which they are interested’. The bank had extended loans to directors and their relatives, the RBI said.

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The Reserve Bank imposed a monetary penalty of 25,000 on the Limbasi Urban Co-operative Bank Ltd., Limbasi, Dist. Kheda, 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 the directions issued by RBI on ‘Loans and Advances to Directors etc. - Directors as surety/guarantors – Clarification’. The banking regulator said the bank had sanctioned a loan where relative of one of the directors of the bank stood as guarantor.

The Reserve Bank imposed a monetary penalty of 3.20 lakh on Early Salary Services Private Limited, Pune for non-compliance with certain provisions of the “Non-Banking Financial Company – Non-Systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016". The apex bank said the Early Salary Services Private Ltd had failed to put in place a system of internal audit of all outsourced activities.

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The actions of the Reserve Bank 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 or the NBFC with its customers.

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Published: 06 Nov 2023, 11:24 PM IST
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