RBI penalizes 9 Co-operative banks from Rs. 25,000 to Rs. 3.10 Lakh for non-compliance
The Reserve Bank of India (RBI) has imposed monetary penalties on nine cooperative banks, including two each from Gujarat, Madhya Pradesh (MP) and Odisha and one each from Maharashtra, Jharkhand and Chhattisgarh. The penalties imposed on these cooperative banks range from Rs25,000 to Rs3.10 lakh. The Berhampur Cooperative Urban Bank Ltd was levied the highest fine of Rs3.10 lakh for failing to adhere to RBI directions mainly on prudential inter-bank (gross) exposure norms and prudential inter-bank counter-party limit.
1. RBI imposes monetary penalty on The Berhampur Cooperative Urban Bank Ltd., Odisha
The Reserve Bank of India (RBI) has imposed, by an order dated November 10, 2022, a monetary penalty of ₹3.10 lakh (Rupees Three lakh and Ten thousand only) on The Berhampur Cooperative Urban Bank Ltd. (the bank) for contravention of/ non-compliance with the directions issued by Reserve Bank of India (RBI) on (i) Exposure Norms and Statutory/Other Restrictions-UCBs (ii) certain provisions of the Reserve Bank of India – (Know Your Customer (KYC) Direction, 2016 and (iii) Depositor Education and Awareness Fund. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into
account the failure of the bank to adhere to the aforesaid directions issued by RBI. 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.
Background
The inspection report of the bank based on its financial position as on March 31, 2020 and a scrutiny of the records of the bank revealed, inter alia, that the bank had failed to (i) comply with the RBI directions on prudential inter-bank (gross) exposure norms and prudential inter-bank counter-party limit (ii) allot Unique Customer Identification Codes (UCIC) to its individual customers and (iii) submit correct certificate regarding transfer to the Depositor Education and Awareness Fund. Based on the same, a Notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the directions.
After considering the bank’s reply and additional submissions made by it, RBI came to the conclusion that the aforementioned charges of non-compliance with RBI directions were substantiated and warranted imposition of monetary penalty.
2. RBI imposes monetary penalty on The Kendrapara Urban Co-operative Bank Ltd., Kendrapara, Odisha
The Reserve Bank of India (RBI) has imposed, by an order dated November 10, 2022, a monetary penalty of ₹50,000/- (Rupees Fifty thousand only) on The Kendrapara Urban Co-operative Bank Ltd., Kendrapara, Odisha (the bank) for contravention of/non-compliance with the directions issued by RBI on the Depositor Education and Awareness Fund. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.
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.
Background
A scrutiny of the records of the bank revealed, inter alia, violation / noncompliance with aforementioned directions issued by RBI to the extent the bank had failed to transfer all eligible balances to the Depositor Education and Awareness Fund but had submitted an incorrect certificate in this regard. Based on the same, a Notice was issued to the bank advising it to show cause as to why penalty should not
be imposed for non-compliance with the directions.
After considering the bank’s reply and additional submissions made by it, RBI came to the conclusion that the aforementioned charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty.
3. RBI imposes monetary penalty on The Jamshedpur Urban Cooperative Bank Ltd., Jamshedpur, Jharkhand
The Reserve Bank of India (RBI) has imposed, by an order dated November 10, 2022, a monetary penalty of ₹1.00 lakh (Rupees One lakh only) on The Jamshedpur Urban Cooperative Bank Ltd., Jamshedpur, Jharkhand (the bank) for contravention of Section 36 (1) read with Section 56 of the Banking Regulation Act, 1949 as the bank failed to adhere to specific directions under the Supervisory Action Framework (SAF). This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.
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.
Background
The inspection report of the bank based on its financial position as on March 31, 2020, revealed, inter alia, non-adherence/violation of specific directions issued to the bank by RBI under SAF. Based on the same, a Notice was issued to the bank advising it to show cause as to why penalty should not be imposed for noncompliance with the said directions.
After considering the bank’s reply and additional submissions made by it, RBI came to the conclusion that the aforementioned charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty.
4. RBI imposes monetary penalty on Krishna Mercantile Co-operative Bank Ltd., Bhopal (M.P.)
The Reserve Bank of India (RBl) has imposed, by an order dated November 09, 2022, a monetary penalty of ₹50,000/- (Rupees Fifty thousand only) on Krishna Mercantile Co-operative Bank Ltd., Bhopal (M.P.) (the bank) for contravention of/ non-compliance with the directions issued by the RBI to Urban Co-operative Banks on Exposure Norms & Statutory/ Other Restrictions. This penalty has been imposed
in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.
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.
Background
The Risk Assessment Report of the bank based on its financial position as on March 31, 2021, revealed, inter alia, that the bank had exceeded prudential interbank (Gross) exposure limit, in contravention of/ non-compliance with the aforesaid directions issued by RBI. Based on the same, a Notice was issued to the bank advising it to show cause as to why penalty should not be imposed for noncompliance with the directions.
After considering the bank’s replies and oral submissions made during personal hearing, RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty.
5. RBI imposes monetary penalty on Renuka Nagarik Sahakari Bank Maryadit, Ambikapur (Chhattisgarh)
The Reserve Bank of India (RBl) has imposed, by an order dated November 09, 2022, a monetary penalty of ₹1.00 lakh (Rupees One lakh only) on Renuka Nagarik Sahakari Bank Maryadit, Ambikapur (Chhattisgarh) (the bank) for contravention of/ non-compliance with the directions issued by the RBI to Urban Co-operative Banks on Exposure Norms & Statutory/ Other Restrictions and Know Your Customer (KYC). This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.
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.
Background
The Risk Assessment Report of the bank based on its financial position as on March 31, 2021, revealed, inter alia, that the bank (i) had not complied with the directions on prudential inter-bank (Gross) exposure limit, (ii) had not carried out periodic review of risk categorization of its customers, and (iii) did not have a robust system to detect suspicious transactions, in contravention of/ non-compliance with the aforesaid directions issued by RBI. Based on the same, a Notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with the directions.
After considering the bank’s replies and oral submissions made during personal hearing, RBI came to the conclusion that the aforesaid charges of non-compliance with RBI directions were substantiated and warranted imposition of monetary penalty.
6. RBI imposes monetary penalty on Jila Sahakari Kendriya Bank Maryadit, Balaghat (M.P)
The Reserve Bank of India (RBl) has imposed, by an order dated November 11, 2022, a monetary penalty of ₹1.00 lakh (Rupees One lakh only) on Jila Sahakari Kendriya Bank Maryadit, Balaghat (M.P) (the bank) for contravention of/ noncompliance with the provisions of the Banking Regulation Act, 1949 (the Act) and directions issued by NABARD on ‘Frauds – Guidelines for Classification, Reporting and Monitoring’. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued.
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.
Background
The inspection report of the bank based on its financial position as on March 31, 2020, revealed, inter alia, that the bank had (i) delayed submission of OSS returns to NABARD and (ii) had reported frauds to NABARD with delay in contravention of/ noncompliance with the provisions of the Act and aforesaid directions issued by NABARD. Based on the same, a Notice was issued to the bank advising it to show
cause as to why penalty should not be imposed for non-compliance with the directions.
After considering the bank’s replies and oral submissions made during the personal hearing, RBI came to the conclusion that the aforesaid charges of noncompliance with the provisions of the Act and NABARD directions were substantiated and warranted imposition of monetary penalty.
7. RBI imposes monetary penalty on Osmanabad Janata Sahakari Bank Ltd., Osmanabad (Maharashtra)
The Reserve Bank of India (RBl) has imposed, by an order dated November 09, 2022, a monetary penalty of ₹2.50 lakh (Rupees Two lakh fifty thousand only) on Osmanabad Janata Sahakari Bank Ltd., Osmanabad, Maharashtra (the bank) for contravention of/ non-compliance with the directions issued by the RBI to Urban Cooperative Banks on Know Your Customer (KYC). This penalty has been imposed in
exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.
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.
Background
The inspection report of the bank based on its financial position as on March 31, 2020, revealed, inter alia, that the bank had not carried out (i) review of risk categorization of accounts and (ii) updation of KYC of its customers as per prescribed periodicity, in contravention of/ non-compliance with the aforesaid directions issued by RBI. Based on the same, a Notice was issued to the bank advising it to show
cause as to why penalty should not be imposed for non-compliance with the directions.
After considering the bank’s replies and oral submissions made during the personal hearing, RBI came to the conclusion that the aforesaid charges of noncompliance with RBI directions were substantiated and warranted imposition of monetary penalty.
8. RBI imposes monetary penalty on The Santrampur Urban Co-operative Bank Ltd., Santrampur, district Mahisagar (Gujarat)
The Reserve Bank of India (RBI) has, by an Order dated November 09, 2022, imposed a monetary penalty of ₹2.00 lakh (Rupees Two lakh only) on The Santrampur Urban Co-operative Bank Ltd., Santrampur, district Mahisagar (Gujarat) (the bank) for contravention of directions issued by RBI on ‘Maintenance of Statutory Reserves – Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) by
Primary (Urban) Co-operative Banks’. This penalty has been imposed in exercise of powers vested in the RBI under the provisions of Section 47 A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.
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.
Background
The statutory inspection of the bank conducted by RBI with reference to the bank’s financial position as on March 31, 2019, and examination of the Inspection Report and all related correspondence pertaining to the same revealed, inter alia, that the bank had not maintained minimum Cash Reserve Ratio (CRR), resulting in contravention of aforesaid directions issued by RBI. In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for contravention of the aforesaid directions issued by RBI.
After considering the bank’s reply to the notice, the RBI came to the conclusion that the aforesaid charge was substantiated and warranted imposition of monetary penalty.
9. RBI imposes monetary penalty on The Nawanagar Co-operative Bank Ltd., Jamnagar (Gujarat)
The Reserve Bank of India (RBI) has imposed, by an order dated November 09, 2022, a monetary penalty of ₹25,000/- (Rupees Twenty-Five Thousand only) on The Nawanagar Co-operative Bank Ltd., Jamnagar (Gujarat) (the bank) for contravention of directions issued by RBI on ‘Loans and advances to directors etc.- directors as surety/guarantors-Clarification’. This penalty has been imposed in exercise of powers
vested in the RBI under the provisions of Section 47 A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.
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.
Background
The statutory inspection of the bank conducted by RBI with reference to its financial position as on March 31, 2021, the Inspection Report and Risk Assessment Report pertaining thereto and examination of all related correspondence revealed, inter alia, that the bank had sanctioned a loan, wherein relative of its director stood as surety / guarantor, resulting in contravention of aforesaid directions issued by RBI.
Based on the same a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the directions issued by RBI.
After considering the bank’s reply to the notice and oral submissions made during the personal hearing, the RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty.
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