The Reserve Bank of India has imposed penalties on five co-op banks and extended direction on one UCB namely Sri Sharada Mahila Co-op Bank based in Tumkur. Of the five banks, four are UCBs namely Shree Mahayogi Lakshmamma Co-op Bank, The Shirpur Peoples’ Co-op Bank, Tirupati Urban Co-operative Bank and Salem based the Attur Town Co-op Bank. The DCCB faulted by RBI is Gondia District Central Co-op Bank.
The Reserve Bank of India has imposed a monetary penalty of Rs 1.00 lakh on Shree Mahayogi Lakshmamma Cooperative Bank Ltd., Kurnool, Andhra Pradesh. The UCB was faulted for non-compliance with directions issued by RBI on Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs.
Salem based the Attur Town Co-operative Bank in Tamil Nadu was penalized by the Reserve Bank of India for non-adherence/violation of directions issued in the matter of Board of Directors – UCBs. The penalty was Rs one lakh.
The Reserve Bank of India imposed a monetary penalty of Rs 2.00 lakh on Gondia District Central Co-operative Bank Limited, in Maharashtra for contravention of/non-compliance with the provisions of the Banking Regulation Act, 1949 (the Act), the Depositor Education and Awareness Fund Scheme, 2014 (the Scheme) and directions issued by NABARD on “Frauds – Guidelines for Classification, Reporting and Monitoring.”
The Shirpur Peoples’ Co-operative Bank from Maharashtra was penalized by the RBI an amount of Rs 3.00 lakh for for contravention of/non-compliance with the directions issued by the RBI to Urban Co-operative Banks on “Exposure Norms and Statutory / Other Restrictions – UCBs”, Income Recognition and Asset Classification (IRAC) and Know Your Customer (KYC).
The Reserve Bank of India has imposed, by an order dated January 04, 2023, a monetary penalty of Rs 50,000/ on Tirupati Urban Co-operative Bank Ltd., Nagpur for contravention of/ non-compliance with the directions issued by the RBI to Urban Co-operative Banks on Know Your Customer (KYC).
These actions are based on deficiencies in regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with its customers, clarifies the RBI.
In all the above cases, the RBI issued notice and sought answers from the concerned banks. 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.
Besides penalties, the RBI also extended direction on Sri Sharada Mahila Co-operative Bank Limited, Tumkur, Karnataka for a further period of three months from January 09, 2023 to April 08, 2023, subject to review.
The UCB was first placed under direction on July 07, 2022. Other terms and conditions of the Directive under reference as modified from time to time, shall remain unchanged, says RBI in a release.
