Categories: Business

RBI imposes monetary penalty on 5 cooperative banks

The Reserve Bank of India (RBI) has fined five cooperative banks for violating or failing to comply with various central bank directives.

Shree Mahayogi Lakshmamma Co-operative Bank Ltd., Kurnool, Andhra Pradesh; The Attur Town Co-operative Bank Ltd., Attur, Salem District, Tamil Nadu; Gondia District Central Co-operative Bank Limited, Gondia (Maharashtra); The Shirpur Peoples’ Co-operative Bank Ltd., Shirpur (Maharashtra); and Tirupati Urban (Maharashtra). According to an RBI announcement, the monetary fines imposed on these organisations vary from Rs 50,000 to Rs 3 lakh.

“This action is based on regulatory compliance problems and is not meant to pronounce on the legitimacy of any transaction or arrangement entered into by the bank with its clients,” the central bank stated in five separate statements.

Based on the bank’s financial position as of March 31, 2021, the Risk Assessment Report revealed that these had contravened or were non-compliant with various RBI directives such as Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs, related to Board of Directors – UCBs, provisions of the Banking Regulation Act, 1949 (the Act), and Know Your Customer.

Pravina Srivastava

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