The Reserve Financial institution of India on Monday imposed penalties on three cooperative banks. The central financial institution imposed penalty on Zoroastrian Co-operative Financial institution, Indian Mercantile Co-operative Financial institution, Lucknow and Bharat Co-operative Financial institution, Mumbai.
The central financial institution has imposed a penalty of ₹1.25 crore on Zoroastrian Co-operative Financial institution, Mumbai for non-compliance with sure instructions, together with one associated to discounting of payments.
In a launch, the RBI mentioned the financial institution had didn’t adjust to its instructions on ‘Discounting of Payments by UCBs – Restricted Letters of Credit score (LC)’ and the provisions of the Guidelines, because it discounted lodging payments beneath LCs with out establishing the genuineness of underlying transactions/ paperwork and didn’t protect information in good order for a interval of eight years.
In a separate launch, the RBI mentioned a penalty of ₹20 lakh has been imposed on Indian Mercantile Co-operative Financial institution, Lucknow for non-compliance with the sure norms associated classification of non-performing property.
Within the launch RBI mentioned that penalty was “for non-compliance with the instructions issued by RBI on ‘Earnings Recognition, Asset Classification, Provisioning and Different Associated Issues’ (IRAC norms). This penalty has been imposed in train of powers vested in RBI conferred beneath part 47A(1)(c) learn with sections 46(4)(i) and 56 of Banking Regulation Act, 1949 (BR Act).”
Whereas, a penalty of ₹50 lakhs was imposed on Bharat Co-operative Financial institution, Mumbai for non-compliance on on ‘Earnings Recognition, Asset Classification, Provisioning and Different Associated Issues’
The central financial institution additionally imposed penalties on 5 different cooperative banks.
The RBI, nevertheless, added that penalties are based mostly on deficiency in regulatory compliance and isn’t meant to pronounce upon the validity of any transaction or settlement entered into by the banks with their clients.
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Supply: Live Mint