The Reserve Bank of India imposed monetary penalties on five cooperative banks for breaching the RBI’s norms. These banks are NKGSB Bank, New India Cooperative Bank, Mehsana Nagrik Sahakari Bank, Idar Nagarik Sahakari Bank and Patdi Nagarik Sahakari Bank. The total fine worth of Rs 84 lakh was imposed on these banks.
The Reserve Bank of India imposed a monetary penalty of Rs 50 lakh (Rupees Fifty lakh only) on NKGSB Co-operative Bank Ltd. (the bank) for non-compliance with the ‘Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016’ issued by RBI.
A monetary penalty of Rs 15.00 lakh has been imposed on New India Co-operative Bank Limited, Mumbai (the bank) for non-compliance with the directions issued by RBI on ‘Donations/Contributions for public/charitable purposes out of profits of UCBs’.
Besides, RBI imposed a monetary penalty of Rs 7 lakh on Mehsana Nagrik Sahakari Bank Limited, Mehsana, 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’ read with ‘Loans and Advances to directors etc. – directors as surety/guarantors – Clarification’, ‘Reserve Bank of India (Co-operative Banks – Interest Rate on Deposits) Directions, 2016’ and contravention of the provisions of section 26A (2) read with section 56 of the Banking Regulation Act, 1949 (BR Act).
Similarly, the apex bank imposed a monetary penalty of Rs 2 lakh on the Idar Nagrik Sahakari Bank Limited, Idar, Dist. Sabarkantha, Gujarat (the bank) for non-compliance with the directions issued by RBI on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’.
And, a monetary penalty of Rs 10.00 lakh was imposed on the Patdi Nagarik Sahakari Bank Limited, Patdi, Dist. Surendranagar, Gujarat (the bank) for non-compliance with the directions issued by RBI on ‘Donations to Trusts and Institutions where Directors, their relatives hold position or are interested’, ‘Loans and Advances to directors, relatives and firms/concerns in which they are Interested’ read with ‘Loans and Advances to directors etc. – directors as surety/guarantors – Clarification’, ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’ and ‘Reserve Bank of India (Co-operative Banks – Interest Rate on Deposits) Directions, 2016’.
The penalties have been imposed in exercise of powers conferred on RBI under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
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.