After the Reserve Bank of India (RBI) revoked the operating license of the Urban Cooperative Bank, the rural Bank had to cease its operations on December 7.
The Reserve Bank of India (RBI) has imposed fines on four banks and revoked the license of Urban Cooperative Bank Limited for not abiding by its rules. This bank operates in Sitapur, Uttar Pradesh. The RBI has affirmed that this cooperative bank has insufficient funds for operations, and there is no prospect of future earnings. Therefore, the bank is being shut down. Following RBI’s action, Urban Cooperative Bank had to cease its operations from Thursday, December 7, 2023.
Read More: Adani total gas ltd on target to install 75,000 EV charging stations by 2030: Gautam Adani
Furthermore, the RBI has also directed the Commissioner and Registrar of Uttar Pradesh to take appropriate measures to close the bank. In addition, RBI states that the bank has not made full payments to its customers. Fortunately, the majority of the bank’s customers will receive almost their entire deposited amount back. The Central Bank of India assures that 98.32 per cent of customers will receive their full money back, and deposits up to Rs 5 lakh are insured. According to RBI data, 98.32 per cent of the bank’s customers have deposits of Rs 5 lakh or less, thus, reaffirming that they will surely receive their funds.
Read More: Why Ambani is scouring sugar mills across India
The RBI has imposed fines on four cooperative banks, including Patan Cooperative Bank, District Central Bank, Rajarshi Shahu Cooperative Bank, and Primary Teachers’ Cooperative Bank. Among these, three banks each face a fine of Rs 1 lakh, and another bank has been fined Rs 10,000. The penalties have been imposed by the severity of the malpractices followed in these banks.
According to RBI notification, the reasons for imposing fines on the above-mentioned banks are:
Read More: From bills to booking travel tickets – Do more with Paytm’s all-in-one app
The District Central Bank was not following the guidelines of the National Bank for Agriculture and Rural Development (NABARD).
Patan Cooperative Bank neglected the KYC rules, while the Primary Teachers’ Cooperative Bank provided gold loans against RBI rules.
Whilst, Rajarshi Shahu Cooperative Bank was not adhering to the minimum balance regulations.
