RBI Imposes Monetary Penalties on Multiple Co-operative Banks for Non-Compliance

RBI Imposes Monetary Penalties on Multiple Co-operative Banks for Non-Compliance

In a series of recent actions aimed at ensuring adherence to regulatory norms, the Reserve Bank of India (RBI) has imposed monetary penalties on several co-operative banks across India for failing to comply with key directions related to credit information, Know Your Customer (KYC) norms, and other banking regulations.

1. The Nawadah Central Co-operative Bank Ltd., Bihar
   A penalty of ₹1.25 lakh was imposed on November 13, 2024, for failing to report borrowers’ credit information to Credit Information Companies (CICs) and neglecting to review the risk status of accounts every six months. These oversights violated RBI’s guidelines on CIC membership and KYC norms.
2. The National Central Co-operative Bank Ltd., Bettiah, Bihar
   This bank was slapped with a fine of ₹4.10 lakh on the same day for not transferring unclaimed deposits to the Depositor Education Fund, failing to share credit details with CICs, and not classifying customer accounts by risk levels. The violations were identified during an inspection conducted by NABARD.
3. The Vepar Udhyog Vikas Sahakari Bank Ltd., Dahod, Gujarat
   A ₹1.50 lakh fine was imposed on November 12, 2024, for not meeting the minimum Cash Reserve Ratio (CRR) requirement and not updating KYC details for certain customers.
4. The Mansa Nagarik Sahakari Bank Ltd., Gandhinagar, Gujarat
   On November 12, 2024, a penalty of ₹50,000 was levied for failing to pay the correct interest on unclaimed term deposits, highlighting a breach of RBI’s deposit rules.
5. M.S. Co-operative Bank Ltd., Vadodara, Gujarat
   A ₹1.50 lakh penalty was imposed on this bank for failing to pay due interest on term deposits that were unclaimed after maturity and for not updating KYC information for high-risk customers.

These penalties are part of RBI’s ongoing effort to ensure that banks comply with regulatory standards, safeguarding customer interests and maintaining financial stability. The fines are based on non-compliance with specific banking rules and are not related to the validity of the banks’ transactions.