RBI has imposed a fine of Rs 5 lakh on Rani Lakshmibai Urban Cooperative Bank based in Jhansi, Rs 2 lakh on Nicholson Cooperative Town Bank in Tanjore, Tamil Nadu and Rs 10,000 on The Urban Cooperative Bank in Rourkela.
RBI imposes fine on many cooperative banks
The Reserve Bank of India (RBI) has imposed penalties on five cooperative banks for lapses in compliance with regulatory provisions. RBI Giving this information in a statement, it said that a fine of Rs 25 lakh has been imposed on the Karnataka State Cooperative Apex Bank based in Bengaluru. He has been found guilty of non-compliance with the banking provisions relating to housing finance. Apart from this, a fine of Rs 15 lakh has been imposed on Thane Bharat Sahakari Bank Limited for not taking care of customer interest in unauthorized electronic banking transactions.
RBI has imposed a fine of Rs 5 lakh on Rani Lakshmibai Urban Cooperative Bank based in Jhansi, Rs 2 lakh on Nicholson Cooperative Town Bank in Tanjore, Tamil Nadu and Rs 10,000 on The Urban Cooperative Bank in Rourkela. The central bank said that the decision to impose penalty on these cooperative banks has been taken on the basis of violation of the provisions of the rules of the banking regulator.
action already taken
Earlier, in a major action, RBI had imposed a penalty of Rs 55 lakh against Visakhapatnam Cooperative Bank Ltd. The Reserve Bank had taken action on this cooperative bank for laxity in the rules of asset classification. After the violation of the guidelines was found, the Reserve Bank issued a show-cause notice against the Visakhapatnam Cooperative Bank and sought its response. It was asked in the notice that the co-operative bank should be told why action should not be taken against it for not following the instructions.
After this, personal hearing started between RBI and Visakhapatnam Cooperative Bank, in which the cooperative bank spoke. RBI was not satisfied with the bank’s reply and imposed a penalty of Rs 55 lakh against Visakhapatnam Cooperative Bank. However, the Reserve Bank made it clear that the imposition of the penalty will not affect the business between the customer and the bank and the banking business will continue as before. There will be no change in the rules of transactions or loans etc.
Why RBI takes action
The Reserve Bank keeps on taking such action from time to time. Apart from public and private banks, the same rule applies to cooperative banks as well. If any bank does not follow the instructions given by the Reserve Bank, if there is a violation of the pre-set rules, then the Reserve Bank takes strict action against it. In this, apart from fines, there is also a provision to cancel the licenses of banks. Licenses of many banks have been canceled in the past.