RBI imposes monetary penalty on five co operative banks. Details here

The (RBI) has imposed monetary penalties on five for deficiencies in regulatory compliance. These co operative banks are: Navsarjan Industrial Co operative Bank Ltd, The Mehsana Jilla Panchayat Karmachari Co operative Bank Ltd, The Halol Urban Co operative Bank Ltd, The Stambhadri Co operative Urban Bank Ltd and The Subramanianagar Co operative Urban Bank Ltd The Reserve Bank imposed a monetary penalty of 7.00 lakh on Navsarjan Industrial Co operative Bank Ltd., Ankleshwar, dist.

Bharuch, Gujarat for non compliance with the directions issued by RBI on ‘Placement of Deposits with Other Banks by Primary (Urban) Co operative Banks (UCBs)’, ‘Reserve Bank of India (KYC) Directions, 2016’ and contravention of certain norms of the Banking Regulation Act, 1949’. Also Read | The apex bank said the Navsarjan Industrial Co operative Bank had breached inter bank gross and counterparty exposure limits, and not carried out review of risk categorization of accounts as per prescribed periodicity.

The bank had not transferred eligible amount to Depositor Education and Awareness Fund, the RBI said. The apex bank imposed a monetary penalty of 3.00 lakh on The Mehsana Jilla Panchayat Karmachari Co operative Bank Ltd., Mehsana, Gujarat for non compliance with the directions issued by RBI on ‘Placement of Deposits with Other Banks by Primary (Urban) Co operative Banks (UCBs)’ and contravention of certain provisions of the Banking Regulation Act, 1949.

Also Read | The RBI said Mehsana Jilla Panchayat Karmachari Co operative Bank had breached the prudential inter bank counterparty exposure limit, and not transferred eligible amount to the Depositor Education and Awareness Fund. The banking regulator imposed a monetary penalty of 2.00 lakh on The Halol Urban Co operative Bank Ltd., Panchmahal, Gujarat 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’, ‘Placement of Deposits with Other Banks by Primary (Urban) Co operative Banks (UCBs)’ and ‘(Co operative Banks Interest Rate on Deposits) Directions, 2016’. Also Read | The RBI said the Halol Urban Co operative Bank had sanctioned a loan where relative of one of the directors of the bank stood as guarantor, and breached prudential inter bank counterparty exposure limit.

The RBI further said the Co operative Bank had not paid interest in matured term deposits from the date of maturity till the date of their repayment at the applicable rate. The RBI imposed a monetary penalty of 50,000 on The Stambhadri Co operative Urban Bank Ltd., Khammam, Telangana for non compliance with the directions issued by RBI on ‘Board of Directors UCBs’ read with the directions issued by RBI on ‘Loans and advances to directors, their relatives, and firms/concerns in which they are interested’.

The Stambhadri Co operative Urban Bank had extended loans to a director and directors’ relatives, the RBI said. Also Read | The RBI imposed a monetary penalty of 25,000 on The Subramanianagar Co operative Urban Bank Ltd., Salem, Tamil Nadu for non compliance with the directions issued by RBI on ‘Board of Directors UCBs’ read with the directions issued by RBI on ‘Loans and advances to directors, their relatives, and firms/concerns in which they are interested’.

The Subramanianagar Co operative Urban Bank had extended loans to a relative of a director, the RBI added. These penalties have been imposed in the exercise of powers conferred on RBI under certain provisions of the Banking Regulation Act, 1949, the banking regulator said. The RBI further said the monetary penalties on the cooperative banks were based on deficiencies in regulatory compliance and were not intended to be pronounced upon the validity of any transaction or agreement entered into by the banks with its customers.

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