RBI imposes monetary penalty on 9 cooperative banks citing violations

The Reserve Bank of India (RBI) on November 14 said it has imposed monetary penalties on nine cooperative banks on account of various violations.

These banks include Berhampur Cooperative Urban Bank, Kendrapara Urban Cooperative Bank, Jamshedpur Urban Cooperative Bank, Krishna Mercantile Cooperative Bank, Renuka Nagrik Sahakari Bank, Jila Sahakari Kendriya Bank Maryadit, Osmanabad Janata Sahakari Bank, Santrampur Urban Co-operative Bank and Nawanagar Co-operative Bank.

The penalties were imposed following inspections by the central bank that revealed rule violations, the RBI said.

This is the latest instance of the RBI clamping down on erring co-operative banks.

The RBI’s enforcement operations are conducted by the Enforcement Department. The RBI’s EFD was set up in April, 2017 to separate enforcement action from supervisory process. EFD identifies actionable violations from the inspection reports, risk assessment reports and scrutiny reports.

Market intelligence reports, references from the top management and complaints are also used for investigation. An Adjudication Committee then adjudicates the violations and determine the quantum of penalty. The penalty thus imposed would be disclosed by RBI in the form of a press release and by the regulated entity as per the disclosure norms. The regulated entity will then be required to pay the penalty within a specific period.