The Reserve Bank of India imposed monetary penalties on two urban cooperative banks and extended the period of direction of Shimsha Sahakara Bank Niyamitha for a further period of three months on Thursday.
The RBI imposed a monetary penalty of Rs 50,000 on Nidhi Co-operative Bank Ltd., Ahmedabad, Gujarat (the bank) for non-compliance with the directions issued by RBI on ‘Loans and Advances to directors, relatives and firms/concerns in which they are Interested’.
A monetary penalty of Rs 2.00 lakh has been imposed on Suvarnayug Sahakari Bank Ltd., Pune, for non-compliance with certain directions issued by RBI on ‘Know Your Customer (KYC)’.
These penalties have 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.
Issuing a press release in the connection with Shimsha Sahakara Bank, the RBI said, “As the statutory inspection of the Shimsha Sahakara Bank Niyamitha, Maddur, Mandya District (hereinafter referred to as “the bank”) with respect to its financial position as on March 31, 2021 revealed significant deterioration of its financials, with assessed CRAR at (-)79.74%, net worth at Rs (-)4.67 crore and deposit erosion at 19.61%, placed the bank under All Inclusive Directions (AID) from the close of business on February 24, 2023.
The AID was extended from time to time and the last extension is valid up to the close of business on August 24, 2024.
The Reserve Bank of India hereby extends directions imposed on the bank, which is effective up to August 24, 2024, for a period of another three months, i.e., up to the close of business on November 24, 2024, subject to review. All other terms and conditions of the Directive shall remain unchanged.