The Reserve Bank of India (RBI) has taken action against five cooperative banks for failing to adhere to regulatory guidelines. The penalised banks include Mandi Urban Co-operative Bank, Rajapalayam Co-operative Urban Bank, Excellent Co-operative Bank, Standard Urban Co-operative Bank, and Howrah District Central Co-operative Bank.
Mandi Urban Co-operative Bank has been levied a fine of ₹6 lakh for non-compliance with specific provisions of RBI directives concerning the 'Placement of Deposits with Other Banks by Primary (Urban)
Co-operative Banks (UCBs).'The fine was imposed following a select scope inspection of the bank's financial position as of March 31, 2022.
RBI found instances of breaching prudential inter-bank exposure limits, prompting the monetary penalty.
Similarly, Howrah District Central Co-operative Bank and Excellent Co-operative Bank have been fined ₹1 lakh each.
The former has been penalised for failing to comply with RBI's directives on 'Know Your Customer (KYC) Directions, 2016,' including the periodic updation of KYC for customer accounts and the establishment of a risk categorisation system for accounts.
Excellent Co-operative Bank, based in Mumbai, Maharashtra, has been fined ₹1 lakh for contravening provisions of the Banking Regulation Act, 1949.
RBI found the bank guilty of not transferring eligible amounts to the Depositor Education and Awareness Fund, as required by law.
On the other hand, RBI has imposed a monetary penalty of ₹75,000 on Rajapalayam Co-operative Urban Bank, while Standard Urban Co-operative Bank has been fined ₹50,000.
Rajapalayam Co-operative Urban Bank was found to have extended loans to directors' relatives and sanctioned loans to nominal members beyond prescribed limits.
Standard Urban Co-operative Bank has been penalised for failing to transfer the eligible amount to the Depositor Education and Awareness Fund within the specified time frame.
