On Monday the Reserve Bank of India imposed penalties on three urban co-operative banks. They are Kokan Mercantile Co-operative Bank, Yashwant Cooperative Bank and Samata Cooperative Development Bank.
RBI levied a monetary penalty of ?2 lakh on The Yashwant Cooperative Bank Limited, Phaltan. The UCB was guilty of non-compliance with directions issued by RBI on Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs.
In a release the TBI said “The 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.”
The inspection report of the bank based on its financial position as on March 31, 2019, revealed, inter alia, non-compliance with aforesaid directions issued by the RBI. Based on the same, a Notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the aforesaid directions.
After considering the bank’s written reply to the show cause notice, RBI came to the conclusion that the aforesaid charges of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty.
Kokan Mercantile Co-operative Bank was penalized ?2 lakh for contravention of directions issued by RBI on Income Recognition, Asset Classification and Provisioning and Other Related Matters – UCBs.
The Reserve Bank of India has imposed a monetary penalty of ?1.00 lakh (on the Samata Cooperative Development Bank Limited, Kolkata, (West Bengal). The UCB was again guilty of non-adherence with the directions issued by RBI to Urban Cooperative Bank on ‘Exposure Norms and Statutory / Other Restrictions – UCBs’.
The scrutiny report of the bank based on its financial position as on March 31, 2019, revealed that the bank had not adhered to the ceiling on unsecured advances for individual/group borrowers (with or without surety) in contravention of/ non-adherence with the directions issued by RBI on ‘Exposure Norms & Statutory/Other Restrictions-UCBs’, said RBI in its release.