RBI imposes monetary penalty on New India Co-operative Bank, Jalgaon People’s Co-operative Bank

The Reserve Bank of India on August 27 imposed a monetary penalty of Rs 25 lakh on Mumbai-based New India Co-operative Bank Ltd and Rs 20 lakh on Jalgaon-based The Jalgaon People’s Co-operative Bank.

The monetary penalty on New India Co-operative Bank was imposed over non-compliance of RBI directions on ‘Frauds in UCBs: Changes in monitoring and reporting mechanism’ and the penalty on The Jalgaon People’s Co-operative Bank was imposed non-compliance with direction issued by RBI on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’.

The central bank conducted statutory inspections of both the banks' financial position as on March 31, 2019, and the inspection report revealed non-compliance with the norms.

Subsequently, the central bank issued notice to the two co-operative banks and upon hearing the bank’s reply, the central bank came to the conclusion that the charges were substantiated and warranted imposition of monetary penalty.