RBI imposes monetary penalty on 3 cooperative banks for violating rules

These banks are Karnavati Co-operative Bank, Vidyasagar Cooperative Bank and Gandevi People’s cooperative Bank.

The Reserve Bank of India (RBI) on October 6 said it has imposed monetary penalties on three cooperative banks for violating rules.

These banks are Karnavati Co-operative Bank, Vidyasagar Cooperative Bank and Gandevi People’s cooperative Bank.

The penalties were imposed due to deficiencies in regulatory compliance by the banks, the central bank said in separate press releases.

A penalty of Rs 2 lakh on Gandevi People’s Co-operative Bank “...has been imposed for non-compliance with the directions on loans and advances to directors, relatives, etc. in which they are interested,” the central bank said.

A penalty of Rs 1.5 lakh was imposed on both Karnavati Co-operative Bank and Vidyasagar Cooperative Bank. In the former’s case, RBI said: “The penalty was imposed for non-compliance with the directions issued on placement of deposits with other banks.”

In the latter’s case, the RBI imposed the penalty for non-compliance with the directions issued on housing finance.

“This action is based on deficiency in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers,” RBI said.