RBI Imposes Monetary Penalty on Four Co-Operative Banks of Gujarat and Maharashtra

RBI Imposes Monetary Penalty on Four Co-Operative Banks of Gujarat and Maharashtra

The fines were slapped due to deficiencies in regulatory compliance

The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs.5 lakh on Lalbaug Co-operative Bank Ltd., Vadodara, Gujarat for non-compliance with its directions issued on Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs) and the RBI (Co-operative Banks - Interest Rate on Deposits) Directions, 2016.

The banking regulatory body stated that the bank had not only breached the prudential inter-bank (gross) exposure limit but also the prudential inter-bank counter-party exposure limit. It failed to pay interest on overdue recurring and term deposits at the applicable rate from the date of maturity till the date of repayment.

A monetary penalty of Rs.3.50 lakh was imposed on The Co-operative Bank of Mehsana Ltd., Mehsana, Gujarat for non-compliance with the directions issued on loans and advances to directors, relatives and firms or concerns, read with Loans and Advances to Directors, etc - Directors as Surety or guarantors – Clarification and Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs).

The bank had sanctioned loans where a relative of one of the directors of the bank stood as guarantor and breached the inter-bank counterparty exposure limit.

RBI imposed a monetary penalty of Rs.3 lakh on The Harij Nagrik Sahakari Bank Ltd., Harij, Gujarat for non-compliance with the directions issued on Maintenance of Cash Reserve Ratio (CRR), Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs), and Interest Rate on Deposits – Directions.

The regulator stated the bank failed to maintain a minimum Cash Reserve Ratio (CRR) for a few days and breached the inter-bank counter-party exposure limit. It failed to make payment of applicable interest on deposits lying in the current accounts of the deceased individual depositors or sole proprietorship concerns.

A monetary penalty of Rs.1 lakh was slapped on The National Co-operative Bank Ltd., Mumbai, Maharashtra for non-compliance with the directions on Maintenance of Deposit Accounts-Primary (Urban) Co-operative Banks. The bank had not conducted an annual review of inoperative accounts.

RBI’s actions were based on deficiencies in regulatory compliance and were not intended to be pronounced upon the validity of any transaction or agreement entered by the banks with its customers.