In its continued efforts to ensure strict adherence to regulatory norms, the Reserve Bank of India (RBI) has recently penalized several co-operative banks for failing to comply with statutory provisions and regulatory guidelines. These penalties aim to strengthen governance and safeguard the financial interests of depositors. Below is a detailed overview of the affected banks, penalty amounts, and reasons for the enforcement actions:
1. The Amod Nagric Co-operative Bank Ltd., Gujarat
- Penalty Imposed: ₹1.00 Lakh
- Violations:
- Sanctioning loans to a director’s relative and permitting relatives as guarantors for certain loans.
- Delay in uploading customer KYC details to the Central KYC Records Registry.
- Legal Basis: Penalized under the Banking Regulation Act, 1949.
2. The Karjan Nagarik Sahakari Bank Ltd., Gujarat
- Penalty Imposed: ₹2.10 Lakh
- Violations:
- Failure to transfer unclaimed deposits to the Depositor Education and Awareness Fund (DEAF) within the stipulated timeframe.
- Non-maintenance of the minimum Cash Reserve Ratio (CRR) on specific days during the financial year 2021-22.
- Non-submission of borrower credit data to Credit Information Companies (CICs).
- Exceeding inter-bank counterparty exposure limits.
- Incomplete periodic KYC updates for customers.
- Legal Basis: Action under the Banking Regulation Act, 1949, and the Credit Information Companies (Regulation) Act, 2005.
3. The Rajula Nagrik Sahakari Bank Ltd., Gujarat
- Penalty Imposed: ₹1.25 Lakh
- Violations:
- Sanctioning cash credit facilities with relatives of directors as guarantors.
- Failure to identify and classify dormant accounts where no activity occurred for over two years.
- Legal Basis: Penalized under the Banking Regulation Act, 1949.
4. The Vijay Commercial Co-operative Bank Ltd., Gujarat
- Penalty Imposed: ₹1.00 Lakh
- Violations:
- Neglecting to conduct the mandatory periodic risk categorization of customer accounts at least once every six months.
- Legal Basis: Action under the Banking Regulation Act, 1949.
5. The Sundargarh District Central Cooperative Bank Ltd., Odisha
- Penalty Imposed: ₹3.00 Lakh
- Violations:
- Sanctioning loans to directors.
- Non-transfer of unclaimed amounts to the Depositor Education and Awareness Fund (DEAF).
- Failure to perform due diligence when opening new accounts.
- Legal Basis: Penalized under the Banking Regulation Act, 1949.
Key Lessons from RBI’s Actions
These penalties serve as a reminder of the critical importance of:
- Transparency in Loan Processes: Banks must ensure that loans and guarantees adhere strictly to regulations, avoiding conflicts of interest.
- KYC Compliance: Accurate and timely maintenance of customer KYC records is essential for trust and operational integrity.
- Statutory and Prudential Norms: Compliance with CRR requirements, DEAF transfers, and periodic account reviews is non-negotiable.
By enforcing these actions, the RBI underscores its commitment to fostering a robust and compliant banking ecosystem that prioritizes depositor safety and institutional transparency.
For an in-depth discussion on these penalties and their implications, visit BanksConnect.in, your trusted platform for daily banking updates and expert insights.
