The Reserve Bank of India (RBI) has imposed penalties totaling ₹14.10 lakhs on five cooperative banks—four from Maharashtra and one from Madhya Pradesh—for failing to comply with regulatory directives. The largest penalty, amounting to ₹7.50 lakhs, was levied against Vaijapur Merchants Cooperative Bank Ltd. in Maharashtra.
Other penalized institutions include Gondia District Central Cooperative Bank Ltd, Prerna Nagari Sahakari Bank Ltd, and Shri Shiveshwar Nagari Sahakari Bank Ltd, all from Maharashtra, along with Madhya Pradesh’s Maa Sharda Mahila Nagrik Sahakari Bank Maryadit.
Vaijapur Merchants Cooperative Bank faced penalties for not adhering to specific directions under the supervisory action framework (SAF) and for violations related to know-your-customer (KYC) regulations. An RBI inspection revealed that the bank made donations to certain entities and offered higher interest rates on deposits compared to those of the State Bank of India (SBI), which is against SAF guidelines. Additionally, the bank lacked a sufficient software system to effectively identify and report suspicious transactions.
Gondia District Central Cooperative Bank was fined ₹2.60 lakhs for violating provisions of the Banking Regulation Act and failing to comply with RBI’s membership directives regarding credit information companies (CICs). Notably, the bank sanctioned a loan to one of its directors and neglected to secure memberships with three CICs.
Prerna Nagari Sahakari Bank incurred a ₹2 lakh penalty after an RBI inspection revealed that the bank approved a loan to a firm linked to a director’s relative, with the director acting as the guarantor.
Shri Shiveshwar Nagari Sahakari Bank was fined ₹1 lakh for not transferring eligible unclaimed deposit amounts to the depositor education and awareness fund (DEAF) within the required timeframe, violating provisions of the Banking Regulation Act.
Lastly, Maa Sharda Mahila Nagrik Sahakari Bank from Madhya Pradesh received a ₹1 lakh penalty for failing to meet RBI’s exposure norms and other statutory restrictions for urban cooperative banks, specifically breaching the prudential limits on inter-bank exposures.
The RBI emphasized that these actions reflect regulatory compliance deficiencies and are not a judgment on the validity of any transactions or agreements made by the banks with their customers.
