Some of the well-known urban cooperative banks in the country were penalized by the RBI recently for flouting its statutory norms. In total, eight UCBs were fined by the regulator catching media headlines. While a majority belonged to Gujarat, there were t least two from Maharashtra.
Among those penalized are Rajkot Peoples Co-operative Bank, Vasai Janata Sahakari Bank, Mogaveera Co-operative Bank, Mumbai, two Surat based UCBs namely The Varachha Co-operative Bank and The Associate Co-operative Bank, Bhadradri Co-operative Urban Bank, The Jammu Central Co-operative Bank and Jodhpur Nagrik Sahakari Bank
The Reserve Bank of India imposed a monetary penalty of ?1.00 lakh “Rajkot Peoples Co-operative Bank Ltd.” for contravention of directions issued by RBI on ‘Loans and advances to directors, relatives and firms /concerns in which they are interested’.
The Reserve Bank of India imposed a monetary penalty of ?2.00 lakh on Vasai Janata Sahakari Bank Ltd., Dist. Palghar for contravention of/non-compliance with the directions issued by RBI on ‘Exposure Norms and Statutory / Other Restrictions – UCBs’.
Mogaveera Co-operative Bank Ltd., Mumbai was penalized Rs 2 lac by the Reserve Bank of India for non-compliance with directions contained in the Supervisory Action Framework (SAF) issued to the bank and Know Your Customers (KYC) Directions, 2016 (as updated from time to time) issued by RBI under section 36 (1) and section 35 A read with section 56 of the Banking Regulation Act, 1949 (the Act).
The Reserve Bank of India imposed a monetary penalty of Rs 1.00 lakh on “The Varachha Co-operative Bank Ltd.”, Surat (Gujarat). The UCB was found guilty of contravention of sub-section (2) of section 26A of the Banking Regulation Act, 1949 (the Act) read with paragraph 3 of The Depositor Education and Awareness Fund Scheme, 2014 (the scheme) enclosed with Circular on ‘The Depositor Education and Awareness Fund Scheme, 2014 – Section 26A of Banking Regulation Act, 1949 – Operational Guidelines’ dated May 27, 2014.
Surat based The Associate Co-operative Bank was fined Rs 4 lac by the Reserve Bank of India for contravention of directions issued by RBI on ‘Loans and advances to directors, relatives and firms / concerns in which they are interested’, and non-compliance with the Master Directions on ‘Know Your Customer (KYC)’.
The Reserve Bank of India has imposed a monetary penalty of Rs 2.00 lakh on Bhadradri Co-operative Urban Bank for non-compliance with directions issued by RBI on ‘Exposure Norms and Statutory / Other Restrictions-UCBs’ and ‘Management of Advances – UCBs’.
The Jammu Central Co-operative Bank was fined Rs 1 lac by the Reserve Bank of India for contravention of provisions of Section 6 and Section 9 read with Section 56 of the Banking Regulation Act, 1949.
The Reserve Bank of India has imposed a monetary penalty of ?1.00 lakh (on the Jodhpur Nagrik Sahakari Bank for non-compliance with certain directions issued by RBI contained in the Master Circular DCBR.CO.BPD. (PCB) MC No.13/13.05.000/2015-16 dated July 01, 2015 on ‘Exposure Norms and Statutory / Other Restrictions – UCBs’.
In all the cases the RBI has clarified that “This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.”