RBI imposes monetary penalty on five co-operative banks for rule violations

Reserve Bank of India

The Reserve Bank of India (RBI) on April 4 said it has imposed monetary penalty on five co-operative banks for rule violations.

These banks are Bassein Catholic Co-operative Bank, Tirumangalam Co-operative Urban Bank, The Tirupattur Urban Co-operative Bank, Nagpur Nagarik Sahakari Bank, and The Himachal Pradesh State Co-operative Bank, the release said.

The central bank imposed Rs 61.60 lakh on Bassein Catholic Co-operative Bank, Rs 28.30 lakh on Nagpur Nagarik Sahakari Bank, Rs 5 lakh on The Himachal Pradesh State Co-operative Bank, and Rs 25,000 each on Tirumangalam Co-operative Urban Bank and The Tirupattur Urban Co-operative Bank, RBI said in a release.

The penalty on Bassein Catholic Co-operative Bank was imposed as bank reported frauds with delay, not carried out periodic review of risk categorisation of accounts during FY 2021-22, levied penal charges for non-maintenance of minimum balances in dormant / inoperative savings bank and current deposit accounts, and restructured credit facilities without establishing the financial viability and reasonable certainty of repayment by the borrowers, RBI said.

Similarly, Nagpur Nagarik Sahakari Bank was penalised because bank had not paid interest on, original principal deposit amounts, for the Sundays/ holidays/ non-business working days on which certain term deposits had matured, while making payment of the proceeds of those deposits on the succeeding working day, balances lying in certain current accounts of deceased individual depositors/sole proprietorship concerns, from the date of their death till the date of repayment of such balances to their claimants, certain matured term deposits, at the rate applicable to savings deposits, for the period they remained unclaimed after maturity, while making repayment of such deposits, release said.

Further, the bank did not undertake periodic review of risk categorization of accounts of its customers, at least once in six months, release added.