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RBI imposes monetary penalty on five Co-op banks for non-compliance of rules

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Mumbai: The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 14 lakh on five cooperative banks for non-compliance with rules on Friday.

The RBI has taken these actions under Section 47A (1) (C), Section 46 (4) (i) I, and Section 56 of the Banking Regulation Act. However, this will not affect the transactions taking place between banks and customers.

A penalty of Rs 5 lakh has been imposed on Jankalyan Co-operative Bank Limited, Mumbai.

The bank has failed to report to the RBI the information relating to the credit of certain eligible credit accounts on the reporting platform within the prescribed time.

A penalty of Rs five lakhs has also been imposed on Urban Co-operative Bank Limited, Pune.

The bank did not comply with the prudential interbank successful exposure limits.

Also, for shortfalls in maintaining the minimum balance in savings bank accounts, fixed penal charges have been imposed instead of penal charges proportionate to the extent of the shortfall.

Apart from this, the bank also failed to classify some accounts as non-performing assets (NPAs).

The Reserve Bank of India has imposed a penalty of Rs two lakhs on Patan Urban Co-operative Bank Limited, Satara (Maharashtra).

This bank failed to transfer the eligible amount to the Depositor Education and Awareness Fund within the prescribed period

A penalty of Rs one lakh has been imposed on Pune Municipal Corporation Servant Co-operative Urban Bank Limited.

This bank failed to comply with the instructions issued on the maintenance of deposit accounts by urban cooperative banks. Could not even conduct an annual review of inoperative accounts.

Meanwhile, a penalty of Rs one lakh has been imposed on Pune Merchants Co-operative Bank Limited for similar reasons.

Before taking action against all the banks, the Reserve Bank of India had issued a show cause notice and asked, “Why should a penalty not be imposed on them?” The decision to impose a monetary penalty was taken only after the response of the banks.

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