RBI Slaps Rs6.25 Lakh Penalty on 5 Cooperative Banks from Gujarat
Moneylife Digital Team 24 November 2023
Reserve Bank of India (RBI) has imposed Rs6.25 lakh penalties on five cooperative banks from Gujarat, citing the violation of different laws prescribed by the regulator. RBI has levied a fine of Rs2.5 lakh, the highest among the banks, on Shri Mahila Sewa Sahakari Bank Ltd. Other banks penalised by RBI are Vejalpur Nagarik Sahkari Bank Ltd, Khambhat Nagarik Sahakari Bank Ltd, Porbandar Vibhagiya Nagarik Sahkari Bank Ltd and  Sarvodaya Nagarik Sahakari Bank Ltd 
 
After considering the reply and oral submissions of all banks during the personal hearing, RBI says it has concluded that the non-compliance charges with its directions were substantiated and warranted the imposition of a monetary penalty.
 
Shri Mahila Sewa Sahakari Bank has been fined Rs2.50 lakh for non-compliance with the directions issued by RBI on placement of deposits with other banks by primary urban cooperative Banks (UCBs) and RBI cooperative banks - interest rate on deposits.
 
The statutory inspection conducted by RBI concerning its financial position as of 31 March 2022, and examination of the inspection report (IR), risk assessment report (RAR) and all correspondence related revealed that Shri Mahila Sewa Sahakari Bank had breached the prudential inter-bank counterparty exposure limit. The Bank also had not paid interest on matured term deposits from the date of maturity till the date of their repayment at the applicable rate. It also failed to pay interest on term deposits for the Sundays, holidays, and non-business working days on which the same had matured and which were repaid on the succeeding working days.
 
Further, Porbandar Vibhagiya Nagarik Sahkari Bank, Sarvodaya Nagarik Sahakari Bank and The Vejalpur Nagarik Sahkari Bank were penalised Rs2 lakh, Rs1 lakh and Rs25,000, respectively for non-compliance with the directions issued by RBI on placement of deposits with other banks by primary UCBs. These banks also breached the inter-bank counterparty exposure limit. 
 
Khambhat Nagarik Sahakari Bank was finned Rs50,000 for non-compliance with the directions issued by RBI on loans and advances to directors, relatives and firms or concerns in which they are interested. The IR, RAR and all correspondence related revealed that the bank had sanctioned loans where relative of one of the directors of the bank stood as guarantor.
 
According to RBI, the penalty is based on deficiencies in regulatory compliance. It is not intended to be pronounced upon the validity of any transaction or agreement entered by the company with its customers, the regulator says.
Comments
Sanjeev B
3 months ago
This is sad joke. The amount is so low the bhelwala outside the bank branch can pay their penalty.
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