These actions on 5 coop banks are based on deficiencies in regulatory compliance
FinTech BizNews Service
Mumbai, April 23, 2024: The Reserve Bank of India (RBI) has, by separate orders in imposed a monetary penalty on five co-operative banks. These actions on the concerned 5 coop banks are based on deficiencies in regulatory compliance, as per the press releases issued by the RBI on April 22, 2024.
RBI has imposed monetary penalty on Ambarnath Jai Hind Co-operative Bank Limited, Ambarnath, Maharashtra; Panvel Co-operative Urban Bank Ltd., Raigad, Maharashtra; Fatehabad Central Cooperative Bank Limited, Fatehabad; Jogindra Central Co-operative Bank Ltd., Solan, Himachal Pradesh and Nakodar Hindu Urban Co-operative Bank Limited, Nakodar.
1 The Reserve Bank of India (RBI) has, by an order dated April 01, 2024, imposed a monetary penalty of Rs3.00 lakh (Rupees Three lakh only) on Ambarnath Jai Hind Co-operative Bank Limited, Ambarnath, Maharashtra (the bank) for non-compliance with certain provisions of RBI directions on ‘Maintenance of Deposit Accounts - Primary (Urban) Co-operative Banks’. This penalty has 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.
The statutory inspection of the bank was conducted by RBI with reference to its financial position as on March 31, 2023. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions.
After considering the bank’s reply to the notice, RBI found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty. The bank had collected (i) fixed penal charges for shortfall in maintenance of minimum balance in the savings bank accounts without giving one month notice to customers regarding minimum balance requirement, (ii) penal charges for non-maintenance of minimum balance in inoperative accounts, and (iii) charges for activation of inoperative accounts.
This action is based on the 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. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
2 The Reserve Bank of India (RBI) has, by an order dated April 01, 2024, imposed a monetary penalty of Rs1.00 lakh (Rupees One lakh only) on The Panvel Co-operative Urban Bank Ltd., Raigad, Maharashtra (the bank) for non-compliance with directions issued under ‘Supervisory Action Framework’ (SAF) for Primary (Urban) Co-operative Banks (UCBs)’. This penalty has 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.
The statutory inspection of the bank was conducted by RBI with reference to its financial position as on March 31, 2023. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions.
After considering the bank’s reply to the notice, RBI found, inter alia, that the charge of sanctioning fresh loans carrying risk weight more than 100% in violation of specific directions issued under SAF was sustained, warranting imposition of monetary penalty.
This action is based on the 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. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
3 The Reserve Bank of India (RBI) has imposed, by an order dated March 31, 2024, a monetary penalty of Rs2.00 lakh (Rupees Two lakh only) on The Fatehabad Central Cooperative Bank Limited, Fatehabad (the bank) for contravention of the provisions of section 26A (2) read with section 56 of the Banking Regulation Act, 1949 (BR Act). This penalty has been imposed in exercise of powers vested in RBI, conferred under the provisions of section 47A(1)(c) read with sections 46(4)(i) and 56 of the BR Act.
The statutory inspection of the bank was conducted by National Bank for Agriculture and Rural Development (NABARD) with reference to its financial position as on March 31, 2022. Based on supervisory findings of non-compliance with statutory provisions/ RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for contravention of provisions of BR Act.
After considering the bank’s reply to the notice and oral submissions made by it during the personal hearing, RBI found, inter alia, that the charge of not transferring the eligible unclaimed amounts to the Depositor Education and Awareness Fund within the prescribed time limit was sustained, warranting imposition of monetary penalty.
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. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
4 The Reserve Bank of India (RBI) has, by an order dated March 31, 2024, imposed a monetary penalty of Rs3.50 lakh (Rupees Three Lakh Fifty Thousand only) on Jogindra Central Co-operative Bank Ltd., Solan, Himachal Pradesh (the bank) for non-compliance with directions issued by National Bank for Agriculture and Rural Development (NABARD) on ‘Frauds-Guidelines for Classification, Reporting and Monitoring’. This penalty has been imposed in exercise of powers vested in RBI, conferred under the provisions of section 47 A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
The statutory inspection of the bank was conducted by NABARD with reference to its financial position as on March 31, 2021. Based on supervisory findings of non-compliance with NABARD directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions.
After considering the bank’s reply to the notice and oral submissions made by it during the personal hearing, RBI found, inter alia, that the charge of delay in reporting of frauds was sustained, warranting imposition of monetary penalty.
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. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
5 The Reserve Bank of India (RBI) has, by an order dated March 31, 2024, imposed a monetary penalty of Rs5.00 lakh (Rupees Five lakh only) on The Nakodar Hindu Urban Co-operative Bank Limited, Nakodar (the bank) for non-compliance with the direction issued by RBI on ‘Investments by Primary (Urban) Co-operative Banks’. This penalty has been imposed in exercise of powers vested in RBI, conferred under the provisions of section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
The statutory inspection of the bank was conducted by RBI with reference to its financial position as on March 31, 2023. Based on supervisory findings of non-compliance with RBI direction and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions.
After considering the bank’s reply to the notice and oral submissions made by it during the personal hearing, RBI found, inter alia, that the charge of breaching prudential inter-bank (gross) exposure limit was sustained, warranting imposition of monetary penalty.
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. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
