The Reserve Bank of India has imposed a monetary fine on three cooperative banks on Friday, with a hefty fine of Rs 5.93 crore imposed on the leading bank of Gujarat, Mehsana Urban Cooperative Bank.
The other two banks on the list are Pusad Urban Cooperative Bank and Jilla Sahakari Kendriya Bank, Chhattarpur, each fined Rs 2.50 lakh.
The RBI has fined Mehsana UCB heftily as among others, it found the UCB guilty of donations to Trusts and Institutions where Directors or their relatives hold positions. In co-op banking culture, this is unacceptable.
RBI release on the issue reads—Mehsana Urban Co-operative Bank has been fined for non-compliance with certain directions issued by RBI on ‘Loans and advances to directors and their relatives, and firms/concerns in which they are interested’, ‘Comprehensive Cyber Security Framework for Primary (Urban) Cooperative Banks (UCBs)’, ‘Income Recognition, Asset Classification, Provisioning, and Other Related Matters’, ‘Know Your Customer (KYC) Norms’ and ‘Donations to Trusts and Institutions where Directors or their relatives hold positions or are interested’.
This penalty has been imposed in exercise of powers conferred on RBI under provisions of section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
A monetary penalty of Rs 2.50 lakh has been imposed on Jilla Sahakari Kendriya Bank Maryadit, Chhattarpur, Madhya Pradesh, for contravention of the provisions of section 26A read with section 56 of the Banking Regulation Act, 1949.
Additionally, RBI imposed a monetary penalty of Rs 2.50 lakh on Pusad Urban Co-operative Bank Ltd., Pusad, Maharashtra, for contravention of specific directions issued by RBI under ‘Supervisory Action Framework (SAF) for Primary (Urban) Co-operative Banks (UCBs)’.
This penalty has been imposed in exercise of powers vested in RBI, conferred under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
In the current financial year, i.e., 2024-25, RBI has imposed penalties on around 65 cooperative banks to date.
During the 2023-24 financial year, the Reserve Bank of India imposed 215 penalties totaling Rs 12.07 crore on cooperative banks for various acts of omission and commission. In the 2022-23 financial year, the RBI imposed 176 penalties worth Rs 14.04 crore.