The Reserve Bank of India has imposed a monetary penalty of Rs five lakh on the Rupee Co-operative Bank based in Pune.

The Urban Cooperative Bank was found violating the guidelines of the Reserve Bank of India.

Rupee cooperative bank granted term loans to some borrowers much in excess of the limit of Rs ten lakh. The bank was also guilty of sanctioning fresh Cash Credit limit to the existing borrowers in excess of Rs ten lakh in 4 cases, in violation of the operational instructions.

The Reserve Bank of India had issued a Show Cause Notice to the bank in response to which the bank submitted a written reply.

After considering the facts of the case, the bank’s reply and also personal submissions in the matter, RBI came to the conclusion that the violation was substantiated and warranted imposition of penalty.

The Kangra Co-operative Bank is the largest co-operative Bank of Delhi. It has reported net profit of Rs.12 crore for 2011-12, registering 66 % growth over previous fiscal.

The Bank has not only been able to retain its existing customers but has also added new customers. It has registered a net growth of more than 4.75% in its customer base.

Talking to Indian Cooperative, Attar Chand Parmar, MD  of the Bank said that during last year there had been a great demand of loans from the customers but the Bank had to turn down plenty of requests to maintain  the mandatory CD ratio of 70%.

In order to meet the loan requirements of the customers while also maintaining the maximum allowed CD ratio of 70%, special efforts are being made to mobilize more deposits. The Bank has increased borrowing rates very recently and made them very competitive.

The Bank has successfully been able to increase its deposits and loans by 16.75 % and 18.34 % respectively during the previous financial year 2011-12.

The Bank has also been able to reduce down both gross and net NPA; which has come down to 5.07% and 0% from 6.20 % and 0.32% respectively.

The CRAR of the bank has also been remained above 15% by showing marginal increase of 0.42% over previous year.

He further said that the Board of the Bank has taken a conscious decision to increase the saving bank interest rate to 5 % for amount up to  Rs.1 lac  and  6% for  amount above one lac which will help the Bank to increase CASA deposits .

The Bank has been paying 18 % dividend continuously for the last three years and the management is likely to propose 18% dividend this year too in the ensuing AGBM for its approval which has been scheduled for September 2.

The Bank is introducing RTGS and NEFT facilities at its own within next two months.

MD further added that continues and steady growth of the Bank has been due to the sincere efforts being done by the staff. The strategic planning and useful guidance of the Board of Directors which is among others represented by Shri B R Sharma, professional Director and Ex-MD of the Bank have helped the bank.

Mr Sharma has been associated with the Kangra Bank for more than five decades and  has been instrumental in bringing the Bank to its present status from a small T&C society of yester years. Above all, the able guidance of Chairman Shri Laxmi Dass with rich experience in varied fields of life has brought us to glorious heights, Mr Parmar added.

Karad Urban Co-operative Bank Ltd situated in Karad was penalized by the Reserve Bank of India. The RBI has imposed a monetary penalty of Rupees five lakh for violation of guidelines of the Reserve Bank of India.

The bank had violated RBI instructions of informing shifting of its branch from one place to another.

The Karad Urban Cooperative Bank shifted its Market Yard Branch, Sangli from 94/A, Market Yard, Sangli-416416 to C.S.No.705/A, `Rajratna Heights’, Miraj Sangli Service Road, Chandani Chowk Corner, Sangali-416416, which involved change in Municipal Ward No.35 to 50, for which no prior permission was obtained from RBI.

The Reserve Bank of India had issued a show cause notice to the bank, in response to which the bank submitted a written reply. After considering the facts of the case and the bank’s reply in the matter, the Reserve Bank of India came to the conclusion that the violation was substantiated and warranted imposition of the penalty.

According to the shareholders’ welfare and development body, the Imphal Urban Cooperative bank’s financial situation has come to a nadir as it is mired in corruption and mismanagement.

Addressing reporters, members of the welfare body said the bank is being controlled by the corrupt governing body and in consequence the bank could collapse anytime.

They added the bank had earlier a good financial background but the recent RBI enquiry has revealed a different picture.

The governing board, according to them, has not only used bank’s money recklessly but also violated the RBI guideline putting people on jobs without vacancies.

Vice Chairman of Urban Cooperative Bank (UCB) was killed and two others were injured when their car rammed into a truck near Lakhimpur in Uttar Pradesh, police said.

Satya Prakash Yadav (50) died on the spot, while the two others, identified as Vineet Pandey and Sarvesh, were injured in the accident that took place on yesterday near Chimney

village, they said.

To popularize electronic transfer of funds, the Reserve Bank of India has allowed cooperative banks to participate in the centralised payment systems.

With this, all the banks can now transfer funds electronically through real time gross settlement system (RTGS) and national electronic funds transfer (NEFT).

At present, the centralised payment systems — RTGS and NEFT can be accessed only by members that included public and private sector banks. As an exception, RRBs have been given access to the NEFT system through their sponsor banks. “On a review, it has been decided to expand the sub- membership route to enable all licensed banks to participate in NEFT and RTGS systems,” RBI said in a notification.

NEFT, an electronic transfer of funds system meant for retail customers while RTGS system facilitates high-value transfer of money with threshold limit of Rs 2 lakh. This would be an alternate mechanism to all licenced banks which have the technological capabilities but are not participating in centralised payment systems on account of either not meeting the access criteria or because of cost considerations, it said.

Eliciting condition for such transactions, the notification said, the sub-member would participate in the centralised payment systems through their sponsor bank which is a direct member of the centralised payment system.

In order to ensure compliance with the timely credit and return discipline which are of utmost importance in centralised payment systems, branches of sub-member that are not under core banking system shall be kept out of the centralised payment systems till such time they are brought under core banking, it said.

-PTI

The Reserve Bank of India has imposed a monetary penalty the Kheralu Nagarik Sahakari Bank Ltd., Dist. Mehsana (Gujarat) for violation of Operational Instructions of the RBI and single and group borrower exposure norms.

These violations were observed during the course of the bank’s statutory inspection with reference to its financial position as on March 31, 2011.

The Reserve Bank of India had issued a show cause notice to the bank, in response to which the bank submitted a written reply.

After considering the facts of the case and the bank’s reply as also personal submissions in the matter, the Reserve Bank of India came to the conclusion that the violations were substantiated and warranted imposition of the penalty.

It was a pity that in spite of their long and close association with the cooperative movement,  several leaders at national level had not yet thought it necessary  to exert their  influence in favour of the cooperative movement.  Weighed down by the government’s negative attitude cooperative banks are suffering greatly , noted P R Mehra, Chairman Khatri  Cooperative Bank  in an exclusive interview with  the  indiancooperative.com  correspondent in New Delhi.

The cooperative banks are playing an important role in the Indian economy providing people with banking services in areas where the big commercial banks were shy of operating.

It was therefore strange that the Indian government followed   policies that weakened the cooperative banks and their resolve to make their valuable contributions to the country’s economy, Chairman added.

Instead of bringing in policies favourable to the co-op banking sector, the govt imposed restrictions and taxes on it impairing its ability to work. Direct tax code was a case in point, Mr Mehra added.

Mr Mehra claims his bank has had a reasonably good career. It posts an annual profit of a little less than 2 crore net. It has about 50 thousand account holders with an annual turnover working out to an impressive Rs 184 crore.

Established way back in 1939, it is one of the oldest banks in the capital. It will soon undergo complete computarization. It has always been functioning in conformity with the rules laid down by the govt and has never attracted adverse comments or punishments from the Reserve Bank of India.

Following in America’s footsteps by effecting a spike in taxation on the cooperative banks would have disastrous consequences, warned Prof Asad Ali, Chairman of Jamia Cooperative bank while talking to Indian Cooperative.com in Delhi.

If the urban cooperative banks continued to pay high taxes, most of them might unravel, he added.

According to Prof Ali, the coop banks are much smaller in size and can barely compare with the national banks.

The govt should bring in a taxation policy that strengthens the capacity of these banks to serve the weaker sections of society. The coop banks are doing a job, the big commercial banks can never do. This simple fact should be adequately appreciated by the govt and the RBI,he asserted.

Founded in 1995, Jamia Cooperative bank has six branches in all. It has posted a net profit of more than 2 crore this year. The bank is working hard to increase its annual profit.

The bank is being democratically governed by a board of 12 directors and has decided to open new branches in Nurnagar and Badarpur.

Jamia Cooperative bank has never attracted any punitive action from the RBI though it transacts business of more than 118 crore. It has been able to win the excellence award in the year 2001-2, claimed its Chairman. Along with Nafcub it intends to celebrate international year of cooperative,2012.

The Bombay high court  has asked the city police to investigate the Veerashaiva Cooperative bank  fraud  using the services of a chartered accountancy firm without any  further procrastination.

The Court order was passed during  hearing of a petition  filed by the cooperative workers  organisation asking for  return  of money and an immediate  action against the people involved in the bank  fraud,

The court had earlier expressed its displeasure at the delayed police action in the matter.

It is noteworthy that  the bank’s directors  and some borrowers had allegedly conspired to loot the bank and the fraud involves  an amount exceeding  50 core.

More than 15 thousand investors stand affected by it. The bank workers’ organisation has petitioned the court to order  arrest and attachment of the properties of the  fraudsters.