RBI has taken strict action on violation of rules. Penalty has been imposed on two banks. Let us know why the Reserve Bank has taken this action?
RBI Action: The Reserve Bank of India has taken strict action against two cooperative banks. Some have violated KYC and some have violated the rules related to loans. After the allegations were confirmed, RBI has imposed a monetary fine of lakhs.
RBI has imposed a fine of Rs 1.75 lakh on Mukkuperi Co-operative Urban Bank Limited, Tamil Nadu. At the same time, a fine of Rs 5 lakh has been imposed on Parbhani District Central Cooperative Bank Limited Maharashtra for violating the rules.
Show cause notice was issued to the banks? (RBI Monetary Penalty)
During the statutory inspection conducted by RBI in relation to the financial condition of the bank, RBI found the negligence in the rules. After which the central bank issued show cause notice to both the banks. After the reply received on the notice and further investigation, it was decided to impose monetary penalty.
What is the reason? (Bank News)
Mukkuperi Co-operative Urban Bank Limited did not follow the instructions issued under SAF, increasing the risk in an area where the level of NPA was high. The bank also failed to upload the KYC records of customers to the central KYC record registry within the prescribed time limit. Parbhani District Central Cooperative Bank Limited failed to approve loans related to directors. It also failed to transfer the eligible amount to the Depositor Education and Awareness Fund within the prescribed time.
