In a decisive move towards ensuring adherence to regulatory standards, the Reserve Bank of India (RBI) announced on April 8th that it has imposed monetary penalties on five cooperative banks for violations of established rules and guidelines.
The banks facing penalties include The Uttarakhand Grameen Bank, Nagar Sahkari Bank, The Raj Laxmi Mahila Urban Co-operative Bank, The Rohtak Central Co-operative Bank, and The Parwanoo Urban Co-operative Bank, as officially stated by the RBI.
Each of these penalties has been meticulously calculated based on the severity of the infractions: The Uttarakhand Grameen Bank and The Raj Laxmi Mahila Urban Co-operative Bank have been levied fines of Rs 5 lakh each, while Nagar Sahkari Bank bears a penalty of Rs 4 lakh. The Rohtak Central Co-operative Bank and The Parwanoo Urban Co-operative Bank face fines of Rs 2 lakh and Rs 1 lakh, respectively.
The specific reasons for penalization were also outlined by the RBI. The Uttarakhand Grameen Bank incurred penalties due to delays in transferring eligible unclaimed amounts to the Depositor Education and Awareness Fund.
Nagar Sahkari Bank’s penalties stemmed from its failure to classify certain loan accounts as non-performing in accordance with the Income Recognition and Asset Classification (IRAC) norms.
Furthermore, The Raj Laxmi Mahila Urban Co-operative Bank was penalized for non-compliance with specific directives issued by the RBI under the Supervisory Action Framework (SAF). This non-compliance pertained to the failure to adhere to directives aimed at reducing single exposure limits for fresh loans and advances by 50% of the applicable regulatory limits.
This stringent action by the RBI underscores the regulator’s commitment to maintaining the integrity and stability of the banking sector, ensuring that cooperative banks operate within the bounds of established regulatory frameworks and guidelines.