Last week a considerable number of cooperative banks and urban co-operative banks were penalized by the Reserve Bank of India on various acts of omission and commission. These co-op banks were from states such as AP, Maharashtra, Madhya Pradesh, Gujarat and others.
The Reserve Bank of India has, by an order dated September 21, 2021, imposed a monetary penalty of Rs 1.00 lakh on Porbandar Commercial Co-operative Bank Ltd., Porbandar (Gujarat) for contravention of directions issued by RBI on ‘Loans and advances to directors, relatives and firms /concerns in which they are interested’.
On September 14th the Reserve Bank of India imposed a monetary penalty of Rs 5.00 lakh on the Kuppam Co-operative Town Bank Ltd., Kuppam, Chittoor District., Andhra Pradesh.
The penalty was imposed as the RBI found that the UCB was non-compliant with certain provisions of the directions issued by the apex bank contained in the Master Circular on Income Recognition, Asset Classification, Provisioning and other related Matters. This Circular was issued by the RBI on July 1, 2015.
Later, on September 16, the Reserve Bank of India imposed a monetary penalty of Rs 1.00 lakh (Rupees One Lakh only) on Jila Sahakari Kendriya Bank Maryadit, Guna, Madhya Pradesh.
The Guna DCCB was found to be guilty 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 RBI on Know Your Customer (KYC).
Another DCCB, which went under RBI’s scalpel is Jila Sahakari Kendriya Bank Maryadit, Chhatarpur, again in Madhya Pradesh. The Reserve Bank of India has imposed a monetary penalty of Rs 1.00 lakh on the bank.
The Chhatarpur DCCB was found guilty of non-compliance with the directions issued by RBI on Know Your Customer (KYC). The penalty has, therefore, been imposed on the bank.
As latest as September 20, the Reserve Bank of India (RBl) has imposed a monetary penalty of Rs 13,000 on the Bhandara District Central Co-operative Bank Limited, Bhandara, Maharashtra.
The Bhandara DCCB was penalized for non-compliance with the provisions of the Credit Information Companies (Regulation) Act, 2005 (CIC Act) and the RBI directions on membership of Credit Information Companies by Co-operative Banks.
Besides the penalties, RBI also extended the directions to a few UCBs last week. The Direction on Padmashri Dr. Vitthalrao Vikhe Patil Co-operative Bank was extended for a further period of three months from September 18, 2021, to December 17, 2021, subject to review.
The UCB was first placed under direction from the close of business on May 19, 2018. These directions were modified from time to time, the validity of which was last extended up to September 17, 2021.