The Reserve Bank of India (RBI) has taken punitive action against several cooperative banks across Gujarat and Kerala for non-compliance with various regulatory guidelines. The central bank's enforcement actions, which included statutory inspections and risk assessment reports, led to fines totaling ₹6.25 lakh.
On Thursday, November 23, 2023, the RBI announced that seven cooperative banks in Gujarat and Kerala were fined for violations of regulatory restrictions. Additionally, the RBI extended its oversight on Thodupuzha Urban Co-operative Bank until February of the following year, with a review scheduled at that time.
The specific infractions included breaches in deposit placement guidelines and inter-bank exposure limits. Shri Mahila Sewa Sahakari Bank Ltd, located in Ahmedabad, incurred the heaviest fine of ₹2.5 lakh due to violations noted in their inspection report. The bank failed to adhere to rules concerning deposit placements with other banks by primary urban cooperative banks (UCBs) and did not pay correct interest on term deposits over non-business working days, following a financial status review on March 31, 2022.
Other banks faced varying penalties based on the nature and severity of their breaches. Sarvodaya Nagarik Sahakari Bank Ltd in Himmatnagar and Porbandar Vibhagiya Nagarik Sahakari Bank Ltd were each fined ₹1 lakh and ₹2 lakh respectively for non-compliance charges regarding deposit placements. Khambhat Nagarik Sahakari Bank was penalized ₹50,000 for violating norms related to 'Loans to Directors,' having approved loans with a director’s relative as a guarantor.
Additionally, Vejalpur Nagarik Sahkari Bank Ltd from Panchmahal district faced a fine of ₹25,000 for breaching deposit placement guidelines and inter-bank exposure limits during personal hearings.
The RBI's enforcement actions underscore its commitment to maintaining stringent regulatory standards within the banking sector and ensuring adherence to prescribed norms for the protection of depositor interests.
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