Due to lapses in regulatory compliance, the Reserve Bank has imposed monetary penalties on five cooperative banks. The affected cooperative banks include The Patliputra Central Cooperative Bank Ltd, Patan Nagarik Sahakari Bank Ltd, The Mandal Nagarik Sahakari Bank Ltd, The Balasore Bhadrak Central Co-operative Bank Ltd, and the Dhrangadhra People’s Co-operative Bank Ltd.
A penalty of ₹1.50 lakh was enforced on the Patliputra Central Cooperative Bank Ltd, Bihar, for failing to comply with RBI directives related to \’The Depositor Education and Awareness Fund Scheme, 2014 – Section 26A of Banking Regulation Act, 1949 – Operational Guidelines\’ and \’Reserve Bank of India – (Know Your Customer (KYC)) Directions, 2016\’. The bank neglected to transfer eligible amounts to the Depositor Education and Awareness Fund, did not categorize customers into risk groups, and lacked a system for periodic KYC updates.
Similarly, Patan Nagarik Sahakari Bank Ltd., Patan, Gujarat, incurred a monetary penalty of ₹1.50 lakh for violating RBI guidelines on \’Loans and advances to directors, relatives and firms/concerns in which they are Interested\’ and \’Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)\’. The bank approved a loan with a relative of one of its directors as a guarantor, breaching prudential inter-bank counterparty exposure limits.
Mandal Nagarik Sahakari Bank Ltd., Mandal, Dist. Ahmedabad, Gujarat, faced a monetary penalty of ₹1.50 lakh for non-compliance with RBI directives on \’Loans and advances to directors, relatives and firms/concerns in which they are interested,\’ \’Loans and Advances to Directors etc. – Directors as surety/guarantors – Clarification,\’ and \’Co-operative Banks – Interest Rate on Deposits.\’ The bank sanctioned loans with a director\’s relative as a guarantor and failed to pay interest at the applicable rate on term deposits.
Balasore Bhadrak Central Co-operative Bank Ltd., Balasore, was penalized ₹50,000 for not adhering to RBI directives on \”Membership of Credit Information Companies (CICs)\”. The bank did not upload credit information to Credit Information Companies.
Finally, Dhrangadhra People’s Co-operative Bank Ltd., Dhrangadhra, Dist. Surendranagar, Gujarat, received a penalty of ₹1.00 lakh for violating RBI directives on \’Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs).\’ The bank breached the inter-bank counterparty exposure limit.
The RBI clarified that these monetary penalties were solely based on deficiencies in regulatory compliance and did not pass judgment on the validity of any transactions or agreements between the banks and their customers.