The Reserve Bank has imposed monetary penalties on four cooperative banks and a non-banking finance company (NBFC) for lapses in regulatory compliance. The cooperative 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 on him ₹48.30 lakh on The Nasik Merchant’s Bank Co-operative 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 the Nasik Merchant Co-operative Bank promptly reported cases of fraud, and imposed punitive charges for non-maintenance of minimum balances in deposit or non-operational (SB) bank accounts. The cooperative imposed penal charges for non-maintenance of minimum balances in SB accounts without notifying the customers, the RBI added.
The RBI imposed a monetary penalty on ₹15 lakh on the Mehsana Urban Cooperative Bank Ltd., Mehsana for non-compliance with the instructions issued by RBI on ‘Rate of Interest on Deposits’. The Reserve Bank said the Mehsana Urban Co-operative had opened ineligible trust Savings Bank accounts, whose total income was not exempt from paying income tax under the Income Tax Act, 1961.
Sangli Sahakari Bank Limited (Mumbai) has imposed a monetary penalty ₹2.00 lakh imposed by the Reserve Bank for non-compliance of the directions issued by RBI on ‘Board of Directors-UCBs’. The banking regulator said Sangli Sahakari Bank Limited had renewed a loan given to a relative of one of its directors.
The Reserve Bank imposed a monetary penalty on him ₹25,000 on Pudukkottai Town Bank Ltd., Pudukkottai, Tamil Nadu for non-compliance of directions issued by RBI on ‘Board of Directors – UCBs’. The apex bank said Pudukkottai Town Bank Ltd had signed loans to its directors contrary to banking norms.
The RBI imposed a monetary penalty on ₹1.50 lakh on Sappers Finance and Consultancy Pvt Ltd., Kolkata for non-compliance of directions issued by RBI on (i) ‘Requirement of obtaining prior approval of RBI in cases of acquisition/transfer of control of Non-Banking Finance Companies (NBFCs). )’; and (ii) read ‘Instructions for Non-Banking Financial Company (Reserve Bank) Returns, 2016’ along with instructions issued by RBI regarding ‘Format of Statutory Auditors’ Certificate (SAC) to be submitted by NBFCs’.
The Reserve Bank said the NBFC not only failed to obtain prior approval from the banking regulator for a change in management but also failed to submit applicable returns and statutory auditor’s certificate to RBI.
The actions of the Reserve Bank were based on deficiencies in regulatory compliance and were not intended to prejudge the validity of any transaction or agreement entered into by the banks or the NBFC with its customers.
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Updated: 20 November 2023, 09:15 PM IST
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