RBI has imposed penalty on three banks. Before taking action, show cause notices were issued to all the banks. It was only after the response that the decision to impose monetary penalty was taken.
RBI Action: Reserve Bank of India has imposed penalty on three co-operative banks located at different places in the country. All these banks failed to comply with the instructions issued by RBI. After which action has been taken against these banks under the provisions of Section 47A (1) (c) read with Section 46 (4) (i) and 56 of the Banking Regulation Act 1949. The Central Bank has given this information through a press release on Wednesday.
Fine imposed on these banks
Action has been taken by RBI against District Central Co-operative Bank Limited (Supaul Bihar), The Ghatal People’s Co-operative Bank Limited (West Bengal) and The Manjeri Co-operative Urban Bank Limited (Mallapuram, Kerala).
This is the reason
- District Central Co-operative Bank Limited failed to comply with the instructions related to KYC issued by RBI. The bank failed to establish a system of necessary review of risk classification of accounts. Therefore, a monetary penalty of Rs 1 lakh has been imposed on it for non-compliance.
- The Ghatal People’s Co-operative Bank Limited failed to comply with the instructions issued on Membership, Exposure Norms and Statutory Management of Credit Information Companies (UCBs). The Bank violated and did not enforce prudential interbank counter party exposure limits. Also failed to upload credit information to CIC, failed to maintain the system of periodic review of risk classification of accounts and transfer all eligible amounts to the Depositor Education and Awareness Fund. Therefore, a fine of Rs 1.5 lakh was imposed on this bank.
- The Manjeri Co-operative Urban Bank Limited has been held guilty of non-compliance with the instructions issued on cyber security framework. Therefore, a penalty of Rs 10,000 has been imposed on this bank.
Customers need not fear
RBI has made it clear that this action has been taken in view of the shortcomings in the working system of banks. This will not have any impact on the transactions taking place between customers and banks.
We have taken all measures to ensure that the information provided in this article and on our social media platform is credible, verified and sourced from other Big media Houses. For any feedback or complaint, reach out to us at informalnewz@gmail.com
