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RBI Action: RBI imposed heavy fine on 4 banks for violating the rules – Details here

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RBI Action: RBI imposed fine on these banks for not following the rules
RBI Action: RBI imposed fine on these banks for not following the rules

RBI has imposed monetary penalty for violating the rules. Reserve Bank of India had issued notice to 4 banks after finding violation of instructions. Let us know why the central bank took this step?

RBI Action: The Reserve Bank of India (RBI) has once again shown strictness on non-compliance of rules. Monetary penalty has been imposed on four banks. This list includes three banks from Gujarat and one from Odisha. RBI has given information about this action through a press release on January 30.

Shri Savli Nagrik Sahakari Bank Limited, Vadodara Gujarat has been fined Rs 2.10 lakh. RBI has imposed a fine of Rs 2 lakh each on The Kosamba Mercantile Co-operative Bank Limited, Surat and Vadali Nagrik Sahakari Bank Limited, Sabarkantha Gujarat. At the same time, the central bank has imposed a monetary penalty of Rs 4 lakh on Odisha State Co-operative Bank Limited located in Odisha.

RBI sent show cause notice to all banks (RBI Monetary Penalty)

During the statutory inspection conducted by RBI in March 2023, it was revealed that all three banks located in Gujarat had ignored the rules. At the same time, NABARD had conducted a statutory inspection of Odisha Co-operative Bank Limited. During this, violation of instructions was detected. After which RBI had issued show cause notice to all the four banks. After the investigation conducted after the response to the notice, it was decided to impose a fine.

Why did RBI take this step?

Sri Savli Nagrik Sahakari Bank Ltd. failed to transfer eligible unclaimed amount to the Depositor Education and Awareness Fund within the stipulated time. Violated the maximum limit of total investment kept under Held to Maturity (HTM) category. Also failed to upload KYC records of customers to the Central KYC Records Registry within the stipulated time. Also failed to submit credit information of its borrowers to any of the three CICs.

The Kosamba Mercantile Co-operative Bank Ltd. failed to comply with prudential inter-bank (gross) and counterparty exposure limits. Also failed to upload KYC records of customers to the Central KYC Records Registry within the stipulated time. Also failed to conduct periodic review of risk classification of accounts at least once in 6 months.

Vadali Nagrik Sahakari Bank Ltd. sanctioned loans in which a relative of the director was a guarantee. Violated prudential inter-bank (gross) and counterparty exposure limits. Also failed to review the risk classification period of some accounts at least once in 6 months.

Odisha State Co-operative Bank Ltd failed to dispose of some non-banking assets within the prescribed period. Also failed to transfer the eligible unclaimed amount to the Depositor Education and Awareness Fund within the prescribed time.


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