RBI penalises 5 co-operative banks over rule violations

Reserve Bank of India

The Reserve Bank of India (RBI) on January 29 said it has imposed monetary penalties on five co-operative banks for rule violations.

These banks are Mula Sahakari Bank, Dr Panjabrao Deshmukh Urban Co-operative Bank, Bhilai Nagrik Sahakari Bank Maryadit, Krushiseva Urban Co-operative Bank, and Jila Sahakari Kendriya Bank Maryadit.

The central bank imposed a Rs 5 lakh penalty on Dr Panjabrao Deshmukh Urban Co-operative Bank, and Rs 75,000 on Jila Sahakari Kendriya Bank Maryadit. A penalty of Rs 50,000 penalty each was imposed on Mula Sahakari Bank, Bhilai Nagrik Sahakari Bank Maryadit, and Krushiseva Urban Co-operative Bank.

Dr Panjabrao Deshmukh Urban Co-operative Bank was penalised for sanctioning fresh loans and advances carrying risk weight of more than 100 percent in violation of specific directions issued under SAF. It had also sanctioned gold loans under the Bullet Repayment Scheme beyond the regulatory limit, and not conducted periodic updation of KYC as per risk categorisation of customers, the release said.

Further, the bank did not conduct periodic reviews of risk categorisation of accounts and lacked robust software that could caution and report suspicious transactions, the release added.

Jila Sahakari Kendriya Bank Maryadit was penalised for not transferring the eligible amount to the Depositor Education and Awareness Fund.