Mumbai: The Reserve Bank of India (RBI) has imposed a cumulative penalty of ₹18.60 lakh on four cooperative banks across Maharashtra, Madhya Pradesh and Karnataka for violating various regulatory directions. The penalties were imposed after supervisory inspections revealed deficiencies in compliance with provisions of the Banking Regulation Act, 1949 and other RBI guidelines.
The highest penalty of ₹10.10 lakh has been imposed on Raigad District Central Cooperative Bank (DCCB) Ltd, Maharashtra. According to RBI, a statutory inspection conducted by the National Bank for Agriculture and Rural Development (NABARD) found that the bank had sanctioned a loan to an entity related to one of its directors, in violation of Section 20(1) of the Banking Regulation Act, 1949. The inspection also revealed that the bank had failed to report borrowers’ credit information to all registered Credit Information Companies (CICs), as mandated under RBI directions for cooperative banks.
Another Maharashtra-based lender, Sangli District Central Cooperative Bank Ltd, has been penalised ₹7 lakh for similar violations of Section 20(1) of the Banking Regulation Act after it sanctioned loans to director-related entities.
In Madhya Pradesh, Shajapur Jilla Sahakari Kendriya Bank Maryadit has been fined ₹1 lakh for failing to transfer eligible unclaimed deposits to the Depositor Education and Awareness (DEA) Fund within the prescribed timeline.
Meanwhile, Citizen Cooperative Bank Ltd, Karnataka, has been imposed a penalty of ₹50,000 for non-compliance with RBI’s prudential norms relating to income recognition, asset classification and provisioning applicable to urban cooperative banks. During the inspection, RBI found that the bank had failed to classify certain loan accounts as Non-Performing Assets (NPAs) in accordance with regulatory requirements.
RBI clarified that the penalties are based solely on deficiencies in regulatory compliance and do not question the validity of any transactions or agreements entered into by the banks with their customers. The central bank also emphasised that the enforcement actions are intended to promote adherence to prudential regulations and strengthen governance and compliance standards in the cooperative banking sector.
