RBI slaps financial penalty on two co-operative banks for non-compliance with guidelines

The Reserve Financial institution Monday imposed a financial penalty on two co-operative banks —The Trichur City Co-operative Financial institution, Thrissur and Bhilai Nagarik Sahakari Financial institution Maryadit, Bhilai for non-compliance with banking guidelines.

The apex financial institution imposed a financial penalty of 2.00 lakh on the Trichur City Co-operative Financial institution Ltd, Thrissur for non-compliance with instructions issued by RBI on administration of advance- UCBs  and   1.25 lakh on Bhilai Nagarik Sahakari Financial institution Maryadit, Bhilai for contravention of/non-compliance with the provisions of the Banking Regulation Act, 1949 and the Depositor Schooling and Consciousness Fund Scheme, 2014.

The inspection report of the Trichur City Co-operative Financial institution based mostly on its monetary place as on March 31, 2020, revealed, inter alia, situations of sanction of gold loans in breach of the cap beneath bullet compensation scheme, the RBI launch mentioned.

Bhilai Nagarik Sahakari Financial institution Maryadit then again had not transferred eligible unclaimed deposits to the Depositor Schooling and Consciousness Fund inside due date.

Based mostly on the experiences, notices have been issued to the co-operative banks advising them to point out trigger as to why a penalty shouldn’t be imposed on them for non-compliance with the aforesaid instructions, launch added.

After contemplating the replies from mentioned the co-operative banks, the apex financial institution got here to the conclusion that the aforesaid cost of non-compliance with RBI instructions was substantiated and warranted imposition of financial penalty.

This motion relies on deficiencies in regulatory compliance and isn’t supposed to pronounce upon the validity of any transaction or settlement entered into by the financial institution with its prospects, RBI mentioned.

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Up to date: 08 Could 2023, 08:47 PM IST