RBI imposes penalty on Saraswat Co-operative Bank, Bassein Catholic Co-operative Bank, Rajkot Nagarik Sahakari Bank

The Reserve Bank has imposed monetary penalties on three co-operative banks for deficiencies in regulatory compliance. These co-operative banks are: Saraswat Co-operative Bank Limited, Bassein Catholic Co-operative Bank Ltd, and Rajkot Nagarik Sahakari Bank Ltd.

The Reserve Bank imposed a monetary penalty of ₹23 lakh (Rupees Twenty Three lakh only) on Saraswat Co-operative Bank Limited, Mumbai for contravention of various provisions Banking Regulation Act, 1949 (BR Act), and the directions issued by RBI on ‘Loans and advances to directors, their relatives, and firms/concerns in which they are interested’.

The Saraswat Co-operative Bank had contravened the provisions of the BR Act and the RBI directions issued thereunder when it renewed a credit facility sanctioned to a borrower company while a director of the bank was holding the position of an independent director in the borrower company, the RBI said.

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The Bassein Catholic Co-operative Bank Ltd, Vasai, Maharashtra, faced a monetary penalty of ₹25 lakh (Rupees Twenty Five lakh only) the RBI said in an order dated September 22, 2023 for contravention of the provisions of Section 20 read with Section 56 of the Banking Regulation Act, 1949 (BR Act), and the directions issued by RBI on ‘Exposure Norms and Statutory / Other Restrictions’.

The Bassein Catholic Co-operative Bank had granted multiple unsecured loans to one of its director/his proprietorship firm.

The Reserve Bank imposed a monetary penalty of ₹13 lakh (Rupees Thirteen lakh only) on Rajkot Nagarik Sahakari Bank Ltd., Rajkot for non-compliance with the directions issued by RBI on ‘Interest Rate on Deposits’.

The Rajkot Nagarik Sahakari Bank had failed to pay eligible interest at the time of repayment on term deposits which matured on a Sunday/ holiday or non-business working day, and paid on the succeeding working days, the RBI said. The bank also failed to pay eligible interest on matured unpaid term deposits for the period they remained unclaimed with the bank, the apex bank said in a statement.

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.