RBI Imposes Penalties on Nutan Nagarik Sahakari and Samarth Sahakari Bank for Violation of Rules

Moneylife Digital Team 25 January 2023

Investor Interest

Reserve Bank of India (RBI) has imposed monetary penalties on two cooperative banks, one from Gujarat and one from Maharashtra, for non-compliance with various rules prescribed by the central bank. Nutan Nagarik Sahakari Bank Ltd from Ahmedabad is fined Rs26 lakh, while Samarth Sahkar Bank Ltd from Solapur is levied a penalty of Rs1.50 lakh by RBI.

In two separate releases, RBI says, “ After considering the reply of banks to the notices, submissions made during the personal hearing and additional information pursuant to personal hearing, RBI came to the conclusion that the charge of non-compliance with the directions was substantiated and warranted imposition of monetary penalty.”

Nutan Nagarik Sahakari was fined Rs26 lakh after the examination of risk assessment report found that the Bank has failed to pay interest at the rate applicable to saving deposits on certain overdue recurring and fixed deposit (FD) accounts at the time of their repayment. The investigation also found the Bank has issued ATM-cum-debit cards to certain cash credit account-holders.

After perusal of reports and submissions by the Bank, RBI found violations of two guidelines prescribed by RBI. One is the guideline on the bank interest rate on deposits and the other is guidelines for the issue of ATM-cum-debit cards by urban cooperative banks.

Samarth Sahakari Bank was found not classifying certain accounts as per income recognition and asset classification (IRAC) norms. After the investigation and submissions of the Bank to the notices, RBI fined the bank Rs1.50 lakh.

Separately, RBI directed SBM Bank (India) Ltd to stop, with immediate effect, all transactions under liberalised remittance scheme (LRS) till further orders. “This action is based on certain material supervisory concerns observed in the bank,” RBI says.

Comments