The Reserve Bank has imposed monetary penalties on four cooperative banks and a non-banking financial company (NBFC) for deficiencies in regulatory compliance. The co-operative banks are: Nasik Merchant’s Co-operative Bank Ltd, Mehsana Urban Co-operative Bank Ltd, Sangli Sahakari Bank Ltd, Pudukkottai Co-operative Town Bank Ltd and the NBFC is Sappers Finance and Consultancy Private Ltd.
The Reserve Bank imposed a monetary penalty of ₹48.30 lakh on The Nasik Merchant’s Co-operative Bank Ltd., Nashik for non-compliance with the directions issued by RBI on ‘Frauds in UCBs: Changes in Monitoring and Reporting mechanism’ and on ‘Maintenance of Deposit Accounts’. The banking regulator said Nasik Merchant’s Co-operative Bank had reported fraud cases with delay, and levied penal charges for non-maintenance of minimum balances in dormant or inoperative savings bank (SB) accounts. The co-operative levied penal charges for non-maintenance of minimum balances in SB accounts without notifying the customers, the RBI added.
The RBI imposed a monetary penalty of ₹15 lakh on the Mehsana Urban Co-operative Bank Ltd., Mehsana for non-compliance with the directions issued by RBI on ‘Interest Rate on Deposits’. The Reserve Bank said the Mehsana Urban Co-operative Bank had opened Savings Bank accounts of ineligible trusts, whose entire income were not exempted from payment of income-tax under the Income-tax Act, 1961.
The Sangli Sahakari Bank Limited (Mumbai) faced a monetary penalty of ₹2.00 lakh imposed by the Reserve Bank for non-compliance with the directions issued by RBI on ‘Board of Directors-UCBs’. The banking regulator said the Sangli Sahakari Bank Limited had renewed a loan given to a relative of one of its directors.
The Reserve Bank imposed a monetary penalty of ₹25,000 on the Pudukkottai Co-operative Town Bank Ltd., Pudukkottai, Tamil Nadu for non-compliance with the directions issued by RBI on ‘Board of Directors – UCBs’. The apex bank said the Pudukkottai Co-operative Town Bank Ltd had extended loans to its directors contrary to the banking norms.
The RBI imposed a monetary penalty of ₹1.50 lakh on Sappers Finance and Consultancy Pvt Ltd., Kolkata for non-compliance with the directions issued by RBI on (i) ‘Requirement for obtaining prior approval of RBI in cases of acquisition/transfer of control of Non-Banking Financial Companies (NBFCs)’; and (ii) ‘Non-Banking Financial Company Returns (Reserve Bank) Directions, 2016’ read with directions issued by RBI on ‘Format of Statutory Auditors’ Certificate (SAC) to be submitted by NBFCs’.
The Reserve Bank said the NBFC had not only failed to obtain prior approval of the banking regulator for change of management but also failed to submit applicable returns and the statutory auditor’s certificate to RBI.
The actions of the Reserve Bank were based on deficiencies in regulatory compliance and were not intended to pronounce upon the validity of any transaction or agreement entered into by the banks or the NBFC with its customers.
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Updated: 20 Nov 2023, 09:15 PM IST
