New Delhi: The Reserve Bank of India (RBI) has imposed monetary penalties on eight Indian banks. Chhattisgarh Rajya Sahakari Bank, The Goa State Co-operative Bank, Garhaa Co-Operative Bank, The Yavatmal Urban Co-operative Bank, Jila Sahakari Kendriya Bank, Warud Urban Co-operative Bank, Indapur Urban Co-operative Bank, and The Mehsana Urban Co-operative Bank were among the eight banks. The penalties imposed on these eight banks ranged from Rs 1 lakh to Rs 40 lakh. Furthermore, the RBI imposed a monetary penalty on Spandana Sphoorty Financial, an NBFC.
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Chhattisgarh Rajya Sahakari Bank Maryadit, Raipur:
The Reserve Bank of India imposed a Rs 25 lakh penalty on this bank for failing to comply with certain provisions of the ‘Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016’.
The penalty follows a statutory inspection of the bank by NABARD regarding the bank’s financial position as of March 31, 2020.
The Inspection Report and examination of all related correspondence revealed, among other things, that the bank had failed to implement a system of periodic review of customer risk categorization, according to the RBI.
The Goa State Co-operative Bank, Panaji:
The central bank fined the bank Rs 2.51 lakh for failing to comply with Section 9 read with Section 56 of the Banking Regulation Act, 1949. (the Act).
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The bank failed to dispose of the non-banking asset within the statutory timeframe from the date of acquisition, according to the statement.
Garha Co-operative Bank Limited, Guna (M.P.):
The bank has been fined Rs 1 lakh for failing to follow the RBI’s instructions on income recognition and asset classification issued to urban cooperative banks (IRAC).
The penalty was imposed following an inspection report based on the bank’s financial position as of March 31, 2019, which revealed, among other things, a violation of/non-compliance with the RBI’s directions issued to Urban Cooperative Banks on Income Recognition and Asset Classification (IRAC).
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The Yavatmal Urban Co-operative Bank Limited, Yavatmal (Maharashtra):
The RBI imposed a monetary penalty of Rs 3.50 lakh on the bank for failing to comply with the RBI’s Know Your Customer directives issued to urban cooperative banks (KYC).
The penalty was imposed after an inspection report based on the bank’s financial position as of March 31, 2020 revealed, among other things, that the bank had I not carried out periodic updation of KYC of its customers and (ii) no system of periodic review of risk categorization of accounts, in violation of/ non-compliance with RBI KYC directions.
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Jila Sahakari Kendriya Bank Maryadit, Chhindwara (M.P.):
The Reserve Bank of India (RBI) imposed a monetary penalty of Rs 1 lakh on the bank for failing to comply with the provisions of the Banking Regulation Act, 1949 (the Act) and Reserve Bank of India (RBI) directions on Know Your Customer (KYC).
An inspection report on the bank revealed that the bank I delayed submission of statutory/OSS returns to RBI and NABARD, (ii) did not carry out a periodic review of risk categorisation of its customers, and (iii) did not carry out periodic updation of KYC of its customers, in contravention of/non-compliance with the provisions of the Act on submission of returns & directions issued by RBI/NABARD and directions on KYC respectively.
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Warud Urban Co-operative Bank Ltd., Warud (Maharashtra):
The RBI imposed a monetary penalty of Rs 1 lakh on the bank for failing to comply with the RBI’s instructions to Urban Co-operative Banks on Exposure Norms and Statutory/Other Restrictions and Know Your Customer (KYC).
The bank’s Risk Assessment Report, based on its financial position as of March 31, 2021, revealed, among other things, that the bank I had not complied with the prudential inter-bank counterparty limit and (ii) had not put in place a robust software for effective identification and reporting of suspicious transactions in contravention of/non-compliance with the RBI’s directions on Exposure Norms & Statutory/Other Restrictions-UCBs and Know Your (KYC).
Indapur Urban Cooperative Bank Ltd., Indapur, Maharashtra:
The bank imposed a Rs 7 lakh penalty on the bank for violating the RBI’s directions on Exposure Norms and Statutory/Other Restrictions – UCBs.
The bank’s Inspection Report, based on its financial position as of March 31, 2021, revealed that it had granted unsecured advances in excess of the aggregate ceiling for such advances that applied to it.
The Mehsana Urban Co-operative Bank Ltd., Mehsana, Gujarat:
The central bank fined the bank Rs 40 lakh for failing to comply with certain provisions of the Reserve Bank of India (Co-operative Banks – Interest Rate on Deposits) Directions, 2016.
An inspection report revealed that the bank failed to pay interest on I term deposits that matured on Sundays/holidays/non-business working days and were repaid on the next working day, for the intervening days, (ii) balance amount lying in current accounts of deceased individual depositors/proprietorship concerns, from the date of their death to the date of repayment to their claimants, and (iii) term deposits that remained unclaimed after
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Spandana Sphoorty Financial:
The non-compliance with some provisions of the “Non-Banking Financial Company – Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016” resulted in a fine of Rs 2.33 crore.
Following an inspection, the RBI decided on the fine after finding that the company had violated the rules regarding the pricing of credit for non-banking financial company-microfinance institutions.
