RBI imposed ban on 5 banks
The Reserve Bank of India (RBI) has imposed fine on 5 cooperative banks for violation of rules. The banks on which RBI has taken action include Indapur Co-operative Bank Limited, The Patan Urban Co-operative Bank Limited, Pune Merchants Co-operative Bank Limited, Jankalyan Co-operative Bank Limited and Pune Municipal Corporation Servants Co-operative Urban Bank Limited. The Reserve Bank has imposed penalty on these banks for different reasons.
The Reserve Bank imposed a monetary penalty of ₹ 5.00 lakh on Indapur Urban Co-operative Bank Ltd., Pune, Maharashtra for non-compliance with the directions issued by RBI on 'Investment by Primary (Urban) Co-operative Banks', 'Maintenance'. Deposit Accounts - Primary (Urban) Co-operative Banks', and 'Income Recognition, Asset Classification, Provisioning and Other Related Matters - UCBs'. The apex bank said Indapur Urban Co-operative Bank has not complied with the prudential inter-bank aggregate exposure limits. The Co-operative Bank had imposed fixed penal charges for shortfall in maintenance of minimum balance in savings bank accounts instead of imposing penal charges proportionate to the extent of shortfall; And some accounts were not classified as non-performing asset (NPA).
- Indapur Urban Co-operative Bank Limited, Pune, Maharashtra: ₹5.00 lakh fine
Non-Compliance Issues:
- The bank failed to comply with the prudential inter-bank aggregate exposure limits.
Fixed penal charge instead of proportionate charge for shortfall of minimum balance in savings bank accounts. - Some accounts were neglected to be classified as non-performing assets (NPAs).
RBI action:
- Imposed a financial penalty of ₹5.00 lakh.
- Jankalyan Sahakari Bank Limited, Mumbai: ₹5.00 lakh fine
Non-Compliance Issues:
- Failure to report credit information on eligible loan accounts to the Central Repository of Information on Large Credit (CRILC) within the prescribed time limit.
RBI action:
- Imposed a financial penalty of ₹5.00 lakh.
- Patan Urban Co-operative Bank Limited, Satara, Maharashtra: ₹2.00 lakh fine
Non-Compliance Issues:
- Violation of Banking Regulation Act, 1949, Section 26A and Section 56.
- Non-compliance of RBI instructions on 'Depositor Education and Awareness Fund'.
- Failure to transfer the eligible amount to the Depositor Education and Awareness Fund within the prescribed period.
RBI action:
- Imposed a financial penalty of ₹2.00 lakh.
- Pune Merchants Co-operative Bank Limited, Pune: ₹1.00 lakh fine
Non-Compliance Issues:
- Non-compliance with RBI instructions on 'Maintenance of Deposit Accounts - Primary (Urban) Co-operative Banks'.
- Failure to conduct annual review of inactive/dormant accounts.
RBI action:
- Imposed a financial penalty of ₹1.00 lakh.
- Pune Municipal Corporation Servants Co-operative Urban Bank Limited, Pune: ₹1.00 lakh fine
Non-Compliance Issues:
- Non-compliance with RBI instructions on 'Maintenance of Deposit Accounts - Primary (Urban) Co-operative Banks'.
- Failure to conduct annual review of inactive/dormant accounts.
RBI action:
- Imposed a financial penalty of ₹1.00 lakh.
Ensuring Regulatory Integrity
RBI clarified that these monetary penalties were imposed solely on the basis of deficiencies in regulatory compliance and were not intended to pass judgment on the validity of any transaction or agreement between banks and their customers. The stringent measures underline the RBI's commitment to maintaining the integrity and stability of the financial system by ensuring that co-operative banks adhere to established regulatory guidelines.