RBI penalises three cooperative banks for violating norms

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The Reserve Bank of India (RBI) on July 25 penalised three cooperative banks for not complying with certain regulatory norms.

The central bank imposed a monetary penalty of Rs 45 lakh on Dombivli Nagari Sahakari Bank as it reported cases of frauds with delay, the central bank said in a release. Further, the bank levied penal charges for non-maintenance of minimum balances in saving bank accounts without notifying the customers and providing them with one month notice for restoration of minimum balances, said the regulator.

Further, the RBI has imposed a monetary penalty of Rs 2 lakh on Odisha-based The United Puri-Nimapara Central Co-operative Bank for failing to undertake risk categorisation of its customers and to update customers Know Your Customer (KYC) profile periodically, the regulator said in a separate release.

Also read: RBI penalises two co-operative banks for rule violations

Additionally, the RBI has penalised Jila Sahakari Kendriya Bank Maryadit with a fine of Rs 3 lakh delayed submission of statutory or off-site surveillance returns to RBI and NABARD. Further, the bank had no system in place to identify suspicious transactions in contravention of with the provisions of the Act and directions issued by RBI/NABARD on submission of returns and the directions on KYC, respectively, the central bank said.

The RBI has been tightening its grip on regulated entities, specifically cooperative banks, to ensure that appropriate corporate governance practices and regulations are followed.

On July 20, an RBI committee had recommended a four-tier regulatory framework for urban cooperative banks (UCBs) based on the size of deposits and their area of operations.

The bankruptcy of erstwhile Punjab & Maharashtra Cooperative Bank (PMC) had prompted the regulator to announce tighter regulations for these lenders.