RBI Imposes Rs 8.35 Lakh Penalty on Five Cooperative Banks for Regulatory Violations
The Reserve Bank of India (RBI) has imposed a total penalty of Rs 8.35 lakh on five cooperative banks, including four from Gujarat and one from Odisha, for failing to comply with banking regulations. The highest fine of Rs 3 lakh was imposed on the Sundargarh District Central Cooperative Bank Ltd in Odisha for violating provisions related to Know-Your-Customer (KYC) norms and other regulatory requirements.
Other banks penalized include:
- Amod Nagric Cooperative Bank Ltd (Gujarat): Fined Rs 1 lakh for issues related to loans and advances to directors and their relatives, as well as for failing to meet KYC compliance and timely uploading customer KYC records.
- Karjan Nagarik Sahakari Bank Ltd (Gujarat): Penalized Rs 2.10 lakh for violations including failure to transfer unclaimed amounts to the Depositor Education and Awareness Fund (DEAF), failure to adhere to KYC norms, and not meeting other RBI directives related to credit information and cash reserve requirements.
- Rajula Nagrik Sahakari Bank Ltd (Gujarat): Fined Rs 1.25 lakh for non-compliance with rules regarding loans to directors' relatives and not classifying certain accounts as dormant after no customer activity for over two years.
- Vijay Commercial Cooperative Bank Ltd (Gujarat): Fined Rs 1 lakh for not conducting timely periodic reviews of risk categorization for certain customer accounts.
RBI's penalties were imposed based on the banks' failure to meet regulatory standards and guidelines issued by the banking regulator. However, the RBI clarified that its actions do not question the validity of any specific transactions or agreements made by the banks with their customers. These actions aim to ensure that the cooperative banks follow the necessary regulatory practices to safeguard customer interests and maintain transparency.
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