RBI Imposes Rs7 Lakh Penalty on 4 Cooperative Banks from Maharashtra
Moneylife Digital Team 06 June 2023
Reserve Bank of India (RBI) has imposed monetary penalties on four cooperative banks from Maharashtra, citing violation of various rules and regulations prescribed by the banking regulator. The banks penalised are: Kokan Mercantile Cooperative Bank Ltd, Bajirao Appa Sahakari Bank Ltd, Sawantwadi Urban Cooperative Bank Ltd and Shri Laxmi Sahakari Bank Ltd.
RBI has imposed Rs3 lakh penalty on Sawantwadi Urban Cooperative Bank and Rs2 lakh penalty on Ankalkhop-based Bajirao Appa Sahakari Bank. Kokan Mercantile Cooperative Bank and Shri Laxmi Sahakari Bank have been slapped with a penalty of Rs1 lakh each. 
RBI says, "After considering the reply of all the banks to the notices, submissions made during the personal hearing, and additional information furnished pursuant to the personal hearing, RBI came to the conclusion that the charges of non-compliance with RBI directions were substantiated and warranted imposition of monetary penalty."
The penalty on Kokan Mercantile Cooperative Bank has been imposed as the Bank was collecting fixed penal charges from customers for not maintaining a minimum balance in their saving bank accounts instead of levying a charge proportionate to the extent of the shortfall. This was done without giving notice to the customer about low minimum balance. 
During its inspection, RBI found that Bajirao Appa Sahakari Bank failed to adhere to prudential inter-bank gross and single counter-party exposure limits. It also failed to put in place a system for periodic updation of know-your-customer (KYC) of accounts or periodic review of risk categorisation of accounts, RBI says.
Shri Laxmi Sahakari Bank did not place a system of periodic review of risk categorisation of accounts.
Further, despite supervisory action framework (SAF) restrictions, Sawantwadi Urban Cooperative Bank was found sanctioning other than the permitted category, new loans and advances and had offered interest rates on term deposits higher than those provided by State Bank of India (SBI).
RBI says the penalty imposed on these four cooperative banks is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered by the bank with its customers.
1 year ago
Very good imposition should be penalized to all bank . for proper checks and balances from RBI .THANKS TO RBI as they are on alert now with FMO is keeping eye in all coperative bank . need to have more better , stricter bye laws ,process .pls need to penalised minimum 10 lakhs to 50 lakhs as penalty to bank from RBI and above to larger banks depending on the gravity and scrunity . thanks to Bjp and shinde sarkar . great job
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