RBI imposes penalties of Rs 95.40 lakh on one StCB and four UCBs

The Reserve Bank of India imposed penalties on five cooperative banks worth Rs 95.40 lakh for breaching the RBI norms and regulations on Thursday.

These banks are Himachal Pradesh State Cooperative Bank, Nagpur Nagarik Sahakari Bank, Tirupattur Urban Cooperative Bank, Tirumangalam Cooperative Urban Bank and Bassein Catholic Cooperative Bank.

The Reserve Bank of India imposed a monetary penalty of Rs 61,60,000 on Bassein Catholic Co-operative Bank Ltd. (the bank) for non-compliance with RBI directions on ‘Frauds in UCBs: Changes in Monitoring and Reporting mechanism’, ‘Know Your Customer (KYC)’, ‘Maintenance of Deposit Accounts’ and ‘Management of Advances’.

The RBI also imposed a monetary penalty of Rs 28.30 lakhon Nagpur Nagarik Sahakari Bank Ltd., Nagpur (the bank), for non-compliance with RBI directions on ‘Interest Rate on Deposits’ and ‘Know Your Customer (KYC)’.

A monetary penalty of Rs 5 lakh imposed on the Himachal Pradesh State Co-operative Bank Limited, Shimla (the bank) for contravention of the provisions of section 26 A (2) read with section 56 of the Banking Regulation Act, 1949 (BR Act).

A monetary penalty of Rs 25,000 has been imposed on the Tirupattur Urban Co-operative Bank Ltd., Tirupattur, Tamil Nadu (the bank) for non-compliance with certain provisions of RBI directions on ‘Exposure Norms and Statutory/ Other Restrictions – UCBs’.

The RBI imposed a monetary penalty of Rs 25,000 on Tirumangalam Co-operative Urban Bank Ltd., Tirumangalam, Tamil Nadu (the bank) for non-compliance with the RBI directions on ‘Board of Directors – UCBs’ read with ‘Loans and advances to directors, their relatives, and firms/concerns in which they are interested’.

These penalties have been imposed in exercise of powers vested in RBI, conferred under the provisions of section 47A (1) (c) read with sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949.

The statutory inspection of the banks was conducted by the RBI with reference to their financial position as on March 31, 2022. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, notices were issued to the banks advising them to show cause as to why penalties should not be imposed on them for their failure to comply with the said directions.