Even before this, the Reserve Bank has taken action against many co-operative banks. Last week, the Reserve Bank of India imposed a fine of Rs 50 lakh on Mumbai’s Bombay Mercantile Co-operative Bank for violating norms.
The Reserve Bank of India (RBI) has imposed a fine of Rs 3 lakh on a cooperative bank. The name of this bank is Sutex Co-Operative Bank Limited. The Reserve Bank has taken this action on September 7, 2021. Sutex Co-Operative Bank is located in Surat, Gujarat. This bank is accused of violating the guidelines of the Reserve Bank. There was a violation of the rules regarding loan, security and guarantor, regarding which the RBI has taken action. However, this action of RBI will not affect the customers. New customers will not be able to become but old customers will not be affected.
The Reserve Bank has taken this action under section 46(4) (i) of the Banking Regulation Act, 1949. It was seen in the investigation that Sutex Co-operative Bank ignored the rules of the Reserve Bank. This action has been taken for not following regulatory rules. On March 31, 2018, the Reserve Bank had conducted an investigation of the Sutex Co-operative Bank and the financial position was also ascertained in it. The Reserve Bank had issued a show cause notice after knowing the status of Sutex Co-operative Bank. In the notice, the bank was asked why the penalty should not be imposed on him. The bank had replied to the notice, on which the RBI after due deliberation decided to impose the penalty.
RBI has already taken action
Even before this, the Reserve Bank has taken action against many co-operative banks. Last week, the Reserve Bank of India imposed a fine of Rs 50 lakh on Mumbai’s Bombay Mercantile Co-operative Bank for violating norms. The RBI also imposed a fine of Rs 2 lakh on Akola District-based Central Co-operative Bank Ltd., Akola (Maharashtra) for non-compliance of certain provisions of Know Your Customer (KYC) norms. “The penalty has been imposed on Bombay Mercantile Bank for non-compliance of directions contained in the RBI’s (Interest Rate on Co-operative Bank Deposits) Directions, 2016 and directions under the Supervisory Action Framework (SAF),” RBI said in a statement. ”
Suryoday Bank has also been fined
In a separate statement, the central bank said that based on the financial position of the central co-operative bank as of March 31, 2019, the inspection report found that the bank should put in place a robust system for alerts as part of effective detection and monitoring of suspicious transactions. I failed. So the bank was fined. The Reserve Bank has also imposed a penalty on Suryoday Bank. RBI has imposed penalty for the second time on Sarvodaya Co-operative Bank. Earlier in July also, the bank was fined.
On March 31, 2018, due to the financial condition of the bank, RBI had got the statutory inspection done by the bank, after which it was found that the Banking Act was not being followed by the bank. The bank was first issued a show cause notice, after which a fine of Rs 2 lakh was imposed on it, dissatisfied with the bank’s reply.
Axis has also been fined
In another action, the Reserve Bank had imposed a penalty on the private sector bank Axis. The RBI said last Wednesday that it has approved Axis Bank Ltd. But has imposed a fine of Rs 25 lakh for violating certain provisions of Know Your Customer (KYC). The central bank said that during February and March, 2020, the account of an Axis Bank customer was verified. During the investigation, it was found that the bank failed to comply with the provisions of RBI’s KYC directive, 2016.
According to the statement of RBI, the bank failed to conduct due diligence with respect to the account concerned. Due to this the bank could not ensure that the transactions in the customer’s account are commensurate with his business and risk profile. RBI has given notice to the bank in this regard. After considering the reply to the notice and the oral explanation, it was decided to impose the fine.
