Synopsis: RBI imposed penalties ranging from Rs. 1 lakh to Rs. 3 lakh on five co-operative banks for regulatory lapses. Included sanctioning loans to directors/relatives, KYC failures, unclaimed funds mismanagement, and inadequate risk categorization. Sundargarh District Central Co-op Bank fined Rs. 3 lakh; others include Rajula, Karjan, Amod, and Vijay Co-op Banks.
The Reserve Bank of India (RBI) has imposed monetary penalties on five co-operative banks for various instances of regulatory non-compliance.
Violations included sanctioning loans to directors or their relatives, failing to transfer unclaimed deposits to the Depositor Education and Awareness Fund (DEAF), and lapses in Know Your Customer (KYC) compliance.
Key Details on Penalized Banks:
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Rajula Nagrik Sahakari Bank Ltd.
- Fine: ₹1.25 lakh
- Violations: Loan sanctions involving directors’ relatives, failure to classify dormant accounts.
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Karjan Nagarik Sahakari Bank Ltd.
- Fine: ₹2.10 lakh
- Violations: Inadequate maintenance of the Cash Reserve Ratio (CRR), non-transfer of unclaimed funds, failure to update KYC records, and lapses in borrower credit submissions.
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Amod Nagrik Co-operative Bank Ltd.
- Fine: ₹1 lakh
- Violations: Loan approvals for directors’ relatives, non-upload of KYC records.
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Sundargarh District Central Co-operative Bank Ltd.
- Fine: ₹3 lakh
- Violations: Sanctioning loans to directors, failing to transfer unclaimed funds, and neglecting due diligence for customers.
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Vijay Commercial Co-op Bank:
- Fine: ₹1 lakh
- Violation: Lack of periodic review of risk categorization.
The RBI’s action underscores its commitment to promoting transparency and regulatory adherence among financial institutions.
In conclusion, the fines reflect the RBI's stringent measures to uphold banking integrity.
These penalties aim to ensure better governance and compliance, particularly in areas like KYC protocols and fund management.
Co-operative banks must prioritize regulatory reforms to avoid similar actions in the future.
Disclaimer: This article is based on publicly available information and regulatory updates. The details are for informational purposes only and may not reflect the final decisions or subsequent appeals by the concerned banks.
