RBI Slaps Rs22.96 Lakh Penalty on 3 Cooperative Banks from Gujarat, 1 from Maharashtra
Moneylife Digital Team 17 December 2024
Reserve Bank of India (RBI) has imposed a penalty of Rs22.96 lakh on four cooperative banks, including three from Gujarat and one from Maharashtra, for non-compliance with the directions issued by the banking regulator. The highest penalty of Rs15 lakh has been imposed on Gujarat-based on SBPP Cooperative Bank Ltd.
 
Other banks penalised by RBI are Maharashtra-based Vaishya Sahakari Bank Ltd and Gujarat-based Tarapur Cooperative Urban Bank Ltd and Bhadran People's Cooperative Bank Ltd.
 
SBPP Cooperative Bank has been penalised for non-compliance with the directions issued by RBI on income recognition, asset classification, provisioning and other related matters with urban cooperative banks (UCBs).
 
RBI's statutory inspection of SBPP Cooperative Bank revealed that the lender failed to classify the loan accounts of certain borrowers as non-performing assets (NPAs).
 
Vaishya Sahakari Bank, located in Mumbai has been penalised Rs5.96 lakh for non-compliance with the RBI guidelines on priority sector lending (PSL) targets and classification. The lender also failed to follow specific RBI instructions related to contributions to the micro and small enterprises (MSE) refinance fund. This was due to a shortfall in meeting the PSL targets set for FY22-23.
 
RBI's investigation revealed that Vaishya Sahakari Bank did not deposit the prescribed amount into the MSE Refinance Fund, which is maintained by the Small Industries Development Bank of India (SIDBI), to address the PSL shortfall. Despite the issuance of a cautionary letter by RBI, Vaishya Sahakari Bank's failure to comply continued, leading to the fine.
 
Bhadran People's Cooperative Bank has been penalised Rs1 lakh for non-compliance with directions issued by RBI on interest rate on deposits and know-your-customer (KYC). The lender had accepted interest-free deposits in accounts other than current account and failed to upload the KYC records of customers onto the Central KYC Records Registry (CKYCR) within the prescribed timeline.
 
Tarapur Cooperative Urban Bank is penalised Rs1 lakh for non-compliance with the certain directions issued by RBI on placement of deposits with other banks by primary UCBs.The lender failed to adhere to the prudential inter-bank counterparty exposure limit. 
 
RBI says its action against these four cooperative banks is based on deficiencies in regulatory compliance and is not intended to pronounce on the validity of any transaction or agreement entered into by the banks with their customers.
 
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