The Reserve Financial institution of India (RBI) has imposed financial penalties on 5 cooperative banks for deficiencies in regulatory compliance. These co-operative banks are: The Manmandir Co-operative Financial institution Ltd, The Lakhvad Nagarik Sahakari Financial institution Ltd, Contai Co-operative Financial institution Restricted, Sarvodaya Co-operative Financial institution Ltd, and Sanmitra Sahakari Financial institution Ltd.
The Reserve Financial institution imposed a financial penalty of ₹3.00 lakh on The Manmandir Co-operative Financial institution Restricted, Vita for non-compliance with the instructions issued by RBI on ‘Know Your Buyer (KYC) Instructions, 2016’ and ‘Upkeep of Deposit Accounts – Major (City) Co-operative Banks’. The apex Financial institution stated The Manmandir Co-operative Financial institution had not ensured periodic updation of KYC for high-risk clients as mandated by the RBI Instructions, and had not performed periodic evaluate of danger categorization of accounts. The financial institution had not performed the annual evaluate of inoperative or dormant accounts, the RBI added.
The RBI imposed a financial penalty of ₹2.00 lakh on The Lakhvad Nagarik Sahakari Financial institution Ltd, Lakhvad, Dist. Mehsana, Gujarat for non-compliance with the instructions issued by RBI on ‘Loans and advances to administrators, family members and companies/considerations during which they’re ’ learn with ‘Loans and Advances to administrators and so on. – administrators as surety/guarantors – Clarification’, and ‘Placement of Deposits with Different Banks by Major (City) Co-operative Banks (UCBs)’. The RBI stated The Lakhvad Nagarik Sahakari Financial institution Ltd had sanctioned a mortgage to the relative of one in every of its administrators and in addition sanctioned sure loans whereby the family members of its administrators stood as guarantors. The apex financial institution additional stated the Sahakari Financial institution breached the prudential inter-bank gross publicity restrict in addition to the prudential inter-bank counterparty publicity restrict.
The Reserve Financial institution imposed a financial penalty of ₹1.00 lakh on Contai Co-operative Financial institution Ltd. for non-compliance with the instructions issued by RBI on ‘Know Your Buyer (KYC) Instructions, 2016’. The banking regulator stated the Contai Co-operative Financial institution had did not put in place a system of periodic evaluate of danger categorisation of accounts.
The RBI imposed a financial penalty of ₹1.00 lakh on Sarvodaya Co-operative Financial institution Restricted, Mumbai for non-compliance with the particular instructions issued by RBI below Supervisory Motion Framework (SAF). The RBI stated the financial institution had sanctioned contemporary loans in violation of particular instructions issued below SAF.
The apex financial institution imposed a financial penalty of ₹1.00 lakh on Sanmitra Sahakari Financial institution Ltd., Pune for non-compliance with the instructions issued by RBI on ‘Upkeep of Deposit Accounts – Major (City) Co-operative Banks’. The banking regulator stated the Sanmitra Sahakari Financial institution had collected fastened penal expenses for the shortfall in upkeep of minimal steadiness in financial savings financial institution accounts, as an alternative of proportionate to the extent of the shortfall.
These penalties have been imposed within the train of powers conferred on RBI below sure provisions of the Banking Regulation Act, 1949, the banking regulator stated.
The RBI additional stated the financial penalties on the cooperative banks had been primarily based on deficiencies in regulatory compliance and weren’t meant to be pronounced upon the validity of any transaction or settlement entered into by the banks with its clients.
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Revealed: 19 Dec 2023, 06:20 PM IST
Supply: Live Mint