RBI Penalises 3 Cooperative Banks and 2 NBFCs for Violating Rules
Moneylife Digital Team 23 May 2023
The Reserve Bank of India (RBI) has imposed monetary penalty on three cooperative banks and two non-banking financial companies (NBFCs) for violating various rules and regulations prescribed by the banking regulator. Of the three banks penalised, two belong to Maharashtra, and one bank and two NBFCs are from Tamil Nadu.
RBI has imposed a monetary penalty of Rs7.5 Lakh on Kanyakumari District Central Cooperative Bank Ltd based in  Nagercoil, Tamil Nadu. The Bank had not transferred balances in certain accounts which were unclaimed for more than 10 years to depositor education and awareness (DEA) fund. Calling it a violation of Section 26-A, Section 56 of the Banking Regulation Act and the DEA scheme, the Bank was also penalised for non-adherence to know-your-customer (KYC) direction, 2016.
Two banks from Maharashtra, Mumbai-based National Cooperative Bank Ltd and Satara-based Krishna Sahakari Bank Ltd are slapped with a penalty of Rs1 lakh each. 
The statutory inspection for both the banks conducted by RBI revealed that these banks were collecting fixed penal charges for the shortfall in maintenance of minimum balance in saving bank accounts. 
The central bank also imposed a penalty of Rs4 lakh on Rain Bow Finance India Ltd, an NBFC from Chennai, for non-compliance with directions issued by RBI relating to standard asset provisioning and leverage ratio. The NBFC had not created contingent provisions against standard assets and had a high leverage ratio.
Another NBFC from Chennai, Srestha Finvest Ltd was slapped with a penalty of Rs2 lakh for failing to obtain prior approval from RBI for appointing directors. It resulted in a change of  more than 30% of the directors, excluding independent directors of the NBFC.
In all five cases, RBI said penalties are based on deficiencies in regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement they entered into with their customers.
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