RBI imposes Monetary Penalty on 3 Cooperative Banks; Know Reason

The Reserve Bank of India (RBI) has imposed Monetary Penalty of Rs.9.50 lakhs on 3 Cooperative Banks for non-compliance with the directions issued by RBI.

These Banks include The National Co-operative Bank Ltd., The Co-operative Bank of Mehsana Ltd., Lalbaug Co-operative Bank.

RBI has imposed a monetary penalty of Rs.1.00 lakh on The National Co-operative Bank Ltd., Mumbai, Maharashtra (the bank) for non-compliance with the directions issued by RBI on ‘Maintenance of Deposit Accounts-Primary (Urban) Co-operative Banks’, by an order dated August 14, 2023.

Monetary Penalty of Rs.3.50 Lakh has been imposed on The Co-operative Bank of Mehsana Ltd., Mehsana, Gujarat (the bank) for non-compliance with the directions issued by RBI on ‘Loans and Advances to directors, relatives and firms/concerns in which they are Interested’ read with ‘Loans and Advances to Directors etc. – Directors as surety/guarantors – Clarification’ and ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’.

Imposition of monetary penalty of Rs.5.00 lakh on Lalbaug Co-operative Bank Ltd., Vadodara, Gujarat (the bank) for non-compliance with the directions issued by RBI on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’ and ‘Reserve Bank of India (Co-operative Banks – Interest Rate on Deposits) Directions, 2016’.

This penalty has been imposed in exercise of powers vested in the RBI under the provisions of Section 47 A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949. This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.