RBI has cancelled one bank’s license. Whereas, another bank has been fined lakhs of rupees.
RBI Action: The Reserve Bank of India has taken strict action against two banks. RBI has imposed a fine of Rs 5 lakh on a cooperative bank in Maharashtra for violating the rules. At the same time, the license of a cooperative bank in Andhra Pradesh has been canceled due to poor financial condition. The central bank has given this information through a press release.
License of this bank canceled
RBI has canceled the license of Uravakonda Co-operative Town Bank Limited located in Uravakonda, Andhra Pradesh. This bank is not allowed to do banking business. It can neither accept deposits nor return them. This decision will also affect the customers.
This is the reason
RBI says that the bank does not have adequate capital and earning prospects. In such a situation, many provisions of the Banking Regulation Act are not complied with. If this bank is allowed to continue, it will prove to be detrimental to the interests of the depositors. The bank is also unable to repay its current depositors with its current financial position. Customers can claim the deposit insurance amount of Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation.
Heavy penalty imposed on this bank
Strict action has been taken against The Yashwant Co-operative Bank Limited located in Satara district of Maharashtra. A fine of Rs 5 lakh has been imposed on the bank. During the statutory inspection on March 31, 2023, it was found that the bank was violating many rules.
The bank failed to classify certain loan accounts as non-performing assets in terms of income recognition, asset classification and provisioning boards and make provisions accordingly. It also failed to review the maturity classification of its customers as per the prescribed maturity period. It also failed to transfer unclaimed balances for more than 10 years to the Depositor Education and Awareness Fund. It charged flat penalty charges without informing customers for non-maintenance of minimum balance in budget accounts.
