RBI imposes monetary penalty on three co-operative banks, cancels registration of one HFC. Details here | Mint
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Business News/ Industry / Banking/  RBI imposes monetary penalty on three co-operative banks, cancels registration of one HFC. Details here
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RBI imposes monetary penalty on three co-operative banks, cancels registration of one HFC. Details here

The RBI has imposed monetary penalties on three co-operative banks and one NBFC for deficiencies in regulatory compliance. These co-operative banks are: Annasaheb Magar Sahakari Bank, Jawhar Urban Co-operative Bank and Janata Urban Co-operative Bank

RBI also cancelled the Certificate of Registration of Chennai based Ind Bank Housing Ltd effective September 21, 2023 (Photo: Mint)Premium
RBI also cancelled the Certificate of Registration of Chennai based Ind Bank Housing Ltd effective September 21, 2023 (Photo: Mint)

The Reserve Bank has imposed monetary penalties on three co-operative banks and one NBFC for deficiencies in regulatory compliance. These co-operative banks are: Annasaheb Magar Sahakari Bank Ltd, The Jawhar Urban Co-operative Bank Ltd, Janata Urban Co-operative Bank Ltd and Finquest Financial Solutions Private Ltd.

The RBI imposed a monetary penalty of 4.00 lakh on Annasaheb Magar Sahakari Bank Ltd., Pune, Maharashtra for non-compliance with certain provisions of RBI directions on ‘Know Your Customer (KYC) direction, 2016’, ‘maintenance of Deposit Accounts - Primary (Urban) Co-operative Banks’, and ‘income recognition, asset classification, provisioning and other related matters – UCBs’.

The Annasaheb Magar Sahakari Bank had not conducted periodic review of risk categorization of accounts, besides not collecting the fixed penal charge for shortfall in maintenance of minimum balance in saving bank accounts, instead of proportionate to the extent of shortfall. Then bank had not adhered to the prudential norms relating to income recognition, asset classification and provisioning, the RBI said.

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The apex bank has imposed a monetary penalty of 1.00 lakh on The Jawhar Urban Co-operative Bank Limited, Palghar, Maharashtra for non-compliance with the directions issued by RBI on ‘Know Your Customer (KYC)’. The bank had not put in place a system for periodic updation of KYC of its customers.

The RBI imposed a monetary penalty of 1.00 lakh on Janata Urban Co-operative Bank Limited, Wai, Maharashtra for non-compliance with the directions issued by RBI on ‘Frauds Monitoring and Reporting Mechanism’. The Janata Urban Co-operative Bank had reported cases of fraud with delay, the RBI said.

The RBI has imposed a monetary penalty of 1.20 lakh on Finquest Financial Solutions Private Limited, Mumbai for non-compliance with the directions issued by RBI on ‘Know Your Customer (KYC) Directions, 2016’ and ‘Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016’. The NBFC had not conducted the risk categorization of its borrowers, and had not make good the shortfall in LTV ratio of 50% for loans granted against collateral of shares within 7 working days. It had also not report data to all CICs as per the extant guidelines.

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 or NBFC with its customers.

Separately, the banking regulator cancelled the Certificate of Registration of Chennai based Ind Bank Housing Ltd effective September 21, 2023. The apex bank said the Ind Bank Housing will neither transact the business of a Housing Finance Institution nor of a Non-Banking Financial Institution as defined in National Housing Bank Act, 1987 and Reserve Bank of India Act, 1934, respectively.

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Published: 12 Oct 2023, 07:18 PM IST
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