RBI has imposed a fine of Rs 7 lakh on four banks. The highest penalty has been imposed on Jijamata Mahila Sahakari Bank Limited.
RBI Action: Reserve Bank of India has imposed penalty on four cooperative banks for violating rules. RBI has taken action against all the banks under Section 46 (4) (i) and Section 47A (1) (c) read with Section 56 of the Banking Regulation Act 1949. The Central Bank has also issued a statement in this regard on Monday, December 4.
Names and reasons of banks
All four banks are from Maharashtra. Their names are Jijamata Mahila Co-operative Bank Limited (Pune), Shri Lakshmikripa Urban Co-operative Bank Limited (Pune), The Konark Urban Co-operative Bank Limited (Ullasnagar) and Chembur Nagrik Co-operative Bank Limited (Mumbai).
Jijamata Mahila Sahakari Bank Limited – RBI has imposed a fine of Rs 4 lakh on it. The Bank did not periodically review the risk classification in the accounts. Also failed to provide information to RBI within the prescribed time limit.
Shri Lakshmikripa Urban Co-operative Bank Limited – A fine of Rs 1 lakh has been imposed on it. This bank has failed to comply with the instructions related to KYC. Apart from this, the bank also did not review the risk classification of its customers from time to time.
The Konark Urban Co-operative Bank Limited – A penalty of Rs 1 lakh has been imposed on it. The Bank had imposed fixed penal charges for shortfall in maintenance of minimum balance in savings accounts instead of imposing penal charges in proportion to the limit of shortfall.
Chembur Nagrik Sahakari Bank Limited – A fine of Rs 1 lakh has been imposed on it. The Bank had imposed fixed penal charges for shortfall in maintenance of minimum balance in savings accounts instead of imposing penal charges in proportion to the limit of shortfall. It also failed to inform customers about this.
What else did RBI say?
Before taking action against all the banks, RBI had issued a show cause notice. The notice asked “Why should he not be fined for failure to comply with the instructions?” Apart from this, the Reserve Bank has also made it clear that this action has been taken in view of the shortcomings of the banks. This will not have any impact on the transactions taking place between customers and banks.
