RBI Imposes Penalty on Zoroastrian Bank, Indian Mercantile Bank & Bharat Co-operative Bank
Moneylife Digital Team 29 November 2022
The Reserve Bank of India on Monday imposed penalties on  three cooperative banks. The central bank imposed penalty on Zoroastrian Co-operative Bank, Indian Mercantile Co-operative Bank, Lucknow and Bharat Co-operative Bank, Mumbai.
 
The central bank has imposed a penalty of Rs1.25 crore on Zoroastrian Co-operative Bank, Mumbai for non-compliance with certain directions, including one related to discounting of bills.
 
In a press release, the banking regulator said the bank had failed to comply with its directions on 'Discounting of Bills by UCBs – Restricted Letters of Credit (LC)' and the provisions of the Rules, as it discounted accommodation bills under LCs without establishing the genuineness of underlying transactions/ documents and failed to preserve records in good order for a period of eight years.
 
In a separate release, the RBI said a penalty of Rs20 lakh has been imposed on Indian Mercantile Co-operative Bank, Lucknow for non-compliance with the certain norms related classification of non-performing assets.
 
In the release RBI said that penalty was “for non-compliance with the directions issued by RBI on ‘Income Recognition, Asset Classification, Provisioning and Other Related Matters’ (IRAC norms). This penalty has been imposed in exercise of powers vested in RBI conferred under section 47A(1)(c) read with sections 46(4)(i) and 56 of Banking Regulation Act, 1949 (BR Act)."
 
While, a penalty of Rs50 lakhs was imposed on Bharat Co-operative Bank, Mumbai for non-compliance on on ‘Income Recognition, Asset Classification, Provisioning and Other Related Matters’
Comments
VN KULKARNI
2 months ago
After going through the Statutory Auditor’s reports for the year ended 31Mar 2020 ( upon which the penalty is imposed) there is no mention of violations of RBI directives/guidelines by the Auditors. Then the question arises who is the real culprit. Even after getting hefty fees they failed in their duties to point out the violations to the Members / Stakeholders immediately after they completed the Audit.If such things goes on a time will come where the number of Urban Banks go down below 100!
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