RBI penalises three cooperative banks for rule violations

RBI

The Reserve Bank of India (RBI) on June 13 imposed monetary penalties on three cooperative banks citing various rule violations. These banks are Ramanagaram Urban Co-operative Bank Limited, Karnataka, The Kancheepuram Central Co-operative Bank Ltd., Kancheepuram, Tamil Nadu and Nandani Sahakari Bank Ltd. of Kolhapur, Maharashtra.

The RBI imposed a penalty of Rs 50,000 on the Kancheepuram bank for non-compliance with the directions issued by the National Bank for Agriculture and Rural Development (NABARD) on Frauds - Guidelines for Classification, Reporting and Monitoring.

This penalty has been imposed in exercise of powers vested in RBI, conferred under the provisions of section 47A(1)(c) read with sections 46(4) (i) and 56 of the Banking Regulation Act, 1949, the RBI said.

The statutory inspection of the bank was conducted by NABARD with reference to its financial position as on March 31, 2023. Based on supervisory findings of non-compliance with NABARD directions subsequently, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said direction.

After considering the bank’s reply to the notice and oral submissions made by it during the personal hearing, RBI found that the charge of delay in reporting of fraud to NABARD was sustained, warranting imposition of monetary penalty, the RBI said.

In the case of Ramanagaram bank, a monetary penalty of Rs 75,000 was imposed for non-compliance with certain provisions of RBI directions on exposure norms and statutory restrictions-UCBs’.

This penalty has been imposed in exercise of powers vested in RBI, conferred under the provisions of section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, the RBI said.

The statutory inspection of the bank was conducted by RBI with reference to its financial position as on March 31, 2022 and a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said direction.

After considering the bank’s reply to the notice and oral submissions made by it during the personal hearing, the RBI found that the charge of non-adherence to prudential inter-bank (Gross) and counter Party exposure limit was sustained, warranting imposition of monetary penalty, the RBI said.

In the case of Nandani Sahakari bank, the RBI imposed a penalty of Rs 2 lakhs for non-compliance with directions issued by RBI on Gold Loan – Bullet Repayment – UCBs’ and ‘Management of Advances – UCBs‘.

Here again, the statutory inspection of the bank was conducted by RBI with reference to its financial position as on March 31, 2023 and a notice was issued to the bank.

After considering the bank’s reply to the notice, RBI found that the charge of sanctioning gold loans beyond prescribed regulatory limit under bullet repayment scheme was sustained, warranting imposition of monetary penalty.