RBI slaps monetary penalty on two co-operative banks for non-compliance with rules
1 min read 08 May 2023, 08:47 PM ISTThe Reserve Bank Monday imposed a monetary penalty on two co-operative banks —Trichur Urban Co-operative Bank, Thrissur and Bhilai Nagarik Sahakari Bank Maryadit, Bhilai for non-compliance with banking rules
PremiumThe Reserve Bank Monday imposed a monetary penalty on two co-operative banks —The Trichur Urban Co-operative Bank, Thrissur and Bhilai Nagarik Sahakari Bank Maryadit, Bhilai for non-compliance with banking rules.
The apex bank imposed a monetary penalty of ₹2.00 lakh on the Trichur Urban Co-operative Bank Ltd, Thrissur for non-compliance with directions issued by RBI on management of advance- UCBs and ₹1.25 lakh on Bhilai Nagarik Sahakari Bank Maryadit, Bhilai for contravention of/non-compliance with the provisions of the Banking Regulation Act, 1949 and the Depositor Education and Awareness Fund Scheme, 2014.
The inspection report of the Trichur Urban Co-operative Bank based on its financial position as on March 31, 2020, revealed, inter alia, instances of sanction of gold loans in breach of the cap under bullet repayment scheme, the RBI release said.
Bhilai Nagarik Sahakari Bank Maryadit on the other hand had not transferred eligible unclaimed deposits to the Depositor Education and Awareness Fund within due date.
Based on the reports, notices were issued to the co-operative banks advising them to show cause as to why a penalty should not be imposed on them for non-compliance with the aforesaid directions, release added.
After considering the replies from said the co-operative banks, the apex bank came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty.
This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, RBI said.
