RBI imposed Monetary Penalties of Rs.60.3 Lakh on 5 Cooperative Banks; Know Why?

The Reserve Bank of India (RBI) has imposed a total penalty of Rs.60.3 lakh on five cooperative banks for violating various regulatory norms.

A monetary penalty of Rs.43.30 lakh has been imposed on Rajkot Nagarik Sahakari Bank Ltd. (Rajkot) for non-compliance with RBI directions on ‘Ban on loans and advances to directors and their relatives, and firms/concerns in which they are interested’, ‘Prohibition on opening of saving bank accounts in the names of certain bodies/ organizations’ and ‘Maintenance of deposit accounts’.

The central bank levied a Rs.5 lakh monetary penalty each on The Kangra Co-operative Bank (New Delhi), Rajdhani Nagar Sahkari Bank (Lucknow), and Zila Sahakari Bank, Garhwal (Kotdwar, Uttarakhand) for non-compliance with directions issued by RBI.

A penalty of Rs.2 Lakh has also been levied on the District Co-operative Bank (Dehradun).

In each case, the RBI stated that the penalties are based on failures in regulatory compliance and are not meant to call into question the validity of any arrangement entered into by the banks with their customers.