RBI fine on 3 Banks: Reserve Bank of India (RBI) has imposed fine on 3 cooperative banks of Gujarat for violating rules.
RBI fine on 3 Banks: The Reserve Bank of India (RBI) has imposed monetary fine on three co-operative banks in Gujarat for violating official norms in conducting their operations. A fine of Rs 7 lakh has been imposed on Uma Co-operative Bank Limited, Vadodara for violation of RBI directions issued on ‘Holding deposits in other banks by Primary (Urban) Co-operative Banks (USBs).
The statutory inspection of the bank conducted by RBI revealed that the bank had violated the prescribed inter-bank counterparty exposure limits and also violated the prescribed inter-bank gross exposure limits. As a result, a show cause notice was issued to the bank.
Why were banks fined?
RBI said in a statement issued on Monday, “After considering the bank’s reply to the notice and oral submissions during the personal hearing, RBI came to the conclusion that the allegation of non-compliance with the above instructions of RBI was proved and the bank was liable to face monetary penalty.” It became necessary to impose a fine.”
Fine imposed on these banks
Similarly, RBI has imposed a fine of Rs 1 lakh on Shihori Nagarik Sahakari Bank Ltd in Banaskantha, Gujarat for non-compliance of its directions on ‘Loans and Advances to Directors, Relatives and Firms/Entities’. RBI has also imposed a fine of Rs 2 lakh on Pij People’s Co-operative Bank Ltd, Pij in Kheda district for non-compliance with directions related to Know Your Customer (KYC) norms.
Statutory inspection of the bank revealed that it failed to periodically review the risk classification of the accounts.
What will be the impact on bank customers?
RBI also said that these actions were based on deficiencies in regulatory compliance and were not intended to pass judgment on the validity of any transaction or agreement entered into by banks with their customers.
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