RBI Imposes Monetary Penalty On These Co-operative Banks: Details Inside

The Reserve Bank of India (RBl) has levied a monetary penalty of Rs 2.00 lakh (Rupees Two Lakh only) on The Akola District Central Co-operative Bank Limited, Akola, Maharashtra (the bank) for non-compliance of KYC through a directive dated September 03, 2021. This penalty is enforced in the exercise of RBI's powers under Section 47 A (1) (c) of the Banking Regulation Act, 1949, read with Section 46 (4) I and Section 56 of the Banking Regulation Act, 1949, in light of the bank's failure to follow RBI's directives. "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," said RBI.

RBI concluded that the aforementioned allegation of non-compliance with RBI directives was justified and merited imposition of monetary penalty after examining the bank's responses and oral representations made during the personal hearing.

RBI has also imposed a monetary penalty of Rs 50 lakh (Rupees fifty lakh only) on Bombay Mercantile Co-operative Bank Ltd., Mumbai (the bank) in an order dated September 02, 2021. The central bank has said that " for non-compliance with directions issued by RBI contained in the Reserve Bank of India (Co-operative Banks - Interest Rate on Deposits) Directions, 2016 and specific directions dated March 05, 2018 and April 11, 2018 issued by RBI under the Supervisory Action Framework (SAF)."

"This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into account failure of the bank to adhere to the aforesaid directions issued by RBI. This action is based on a deficiency 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," according to the statement of RBI.

RBI has also placed a monetary penalty of Rs 1.00 lakh (Rupees one lakh only) on The Kosamba Mercantile Co-operative Bank Ltd., Kosamba, Dist. Surat (Gujarat) (the bank) in an order dated September 02, 2021. For non-compliance with directions issued by RBI contained in the Circular on 'Loans and advances to directors, relatives and firms/concerns in which they are interested' dated April 29, 2003, the monetary slap has been issued. "This penalty has been imposed in exercise of powers vested in 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," said RBI.