Last week several co-op banks and UCBs were penalized for non-adherence with the norms of RBI. While some banks ignored issues like Housing loan limits, others failed on Customer Protection.
These banks are namely– The Karnataka State Co-operative Apex Bank, Thane Bharat Sahakari Bank, Rani Laxmibai Urban Co-operative Bank, The Urban Co-operative Bank based in Rourkela and The Nicholson Co-operative Town Bank (No.8) based in Thanjavur District of Tamil Nadu.
The Reserve Bank of India has imposed a monetary penalty of Rs 25.00 lakh on The Karnataka State Co-operative Apex Bank Ltd. The co-op Bank was found guilty of non-compliance with directions issued by the Reserve Bank of India (RBI) on “Housing Finance”.
The statutory inspection of the bank conducted by NABARD with reference to the bank’s financial position as on March 31, 2019, the Inspection Report pertaining thereto and examination of all related correspondence revealed, inter alia, that the bank failed to abide by the RBI directions limiting the quantum of housing loan that can be granted to an individual borrower by a State co-operative bank.
RBI imposed a monetary penalty of Rs 15.00 lakh on Thane Bharat Sahakari Bank Limited, for non-compliance with the directions issued by RBI on ‘Customer Protection – Limiting Liability of Customers of Co-operative Banks in Unauthorised Electronic Banking Transactions’.
Rani Laxmibai Urban Co-operative Bank based in Jhansi, Uttar Pradesh was also penalized by the Reserve Bank of India which imposed a monetary penalty of Rs 5.00 lakh. The UCB was guilty of contravention of section 35A, section 36 (1) (a) read with section 56 of the Banking Regulation Act, 1949 as the bank failed to adhere to specific directions issued to it by RBI under Supervisory Action Framework (SAF).
Another UCB penalized by the RBI was The Urban Co-operative Bank based in Rourkela. The RBI imposed a monetary penalty of Rs 10000. The UCB is guilty of contravention of/ non-compliance with the directions issued by RBI on the Depositor Education and Awareness Fund.
The Reserve Bank of India imposed a monetary penalty of Rs 2.00 lakh on The Nicholson Co-operative Town Bank (No.8) based in Thanjavur District of Tamil Nadu. The UCB was found violating the directions issued under Exposure Norms and Statutory / Other Restrictions – UCBs.