The Reserve Bank of India (RBI) has imposed, by an order dated September 18, 2023, a monetary penalty of ₹4.50 lakh (Rupees Four lakh Fifty thousand only) on Gujarat Mercantile Co-operative Bank Ltd., Ahmedabad, Gujarat (the bank) for non-compliance with the directions issued by RBI on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’ and ‘Maintenance of Cash Reserve Ratio (CRR)’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47 A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949.

This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

Background

The statutory inspection of the bank conducted by RBI with reference to its financial position as on March 31, 2022, and examination of the Inspection Report, Risk Assessment Report and all correspondence related thereto, revealed, inter alia, that the bank had (i) breached the prudential inter-bank gross exposure limit, (ii) breached the prudential inter-bank counterparty exposure limit, and (iii) not maintained minimum Cash Reserve Ratio (CRR) for certain days. In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for failure to comply with the directions, as stated therein.

After considering the bank’s reply to the notice and oral submissions made by it during the personal hearing, RBI came to the conclusion that the charge of non-compliance with aforesaid RBI directions was substantiated and warranted imposition of monetary penalty.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2023-2024/1117

The Reserve Bank of India (RBI) has imposed, by an order dated September 14, 2023, a monetary penalty of ₹1.50 Lakh (Rupees One Lakh and Fifty Thousand only) on Vidyasagar Central Co-operative Bank Limited, Midnapore, West Bengal (the bank) for non-compliance with the directions issued by RBI on “Housing Finance”. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949.

This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers..

Background

The statutory inspection of the bank conducted by NABARD with reference to its financial position as on March 31, 2022, inspection report pertaining thereto and examination of all related correspondence revealed, inter alia, that the bank had failed to comply with RBI directions limiting the quantum of housing loan that can be granted to an individual borrower by a District Central Co-operative Bank. Based on the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with the RBI directions, as stated therein.

After considering the bank’s reply to the notice, additional submissions and oral submissions made by it during the personal hearing, RBI came to the conclusion that the aforementioned charge of non-compliance with the RBI directions was substantiated and warranted imposition of monetary penalty.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2023-2024/1067

The Reserve Bank of India (RBI) has imposed, by an order dated September 14, 2023 a monetary penalty of ₹1.00 Lakh (Rupees One Lakh only) on The Santragachi Co-operative Bank Ltd., West Bengal (the bank) for non-compliance with the directions issued by RBI on ‘Exposure Norms and Statutory/Other Restrictions - UCBs’. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949.

The Reserve Bank of India (RBI) has, by an order dated August 31, 2023, imposed a monetary penalty of ₹1.50 Lakh (Rupees One Lakh Fifty Thousand only) on The Karnavati Co-operative Bank Ltd., Ahmedabad, Gujarat (the bank) for non-compliance with the directions issued by RBI on ‘Loans and advances to directors, relatives and firms/concerns in which they are interested’ read with ‘Loans and advances to directors etc.- directors as surety/guarantors- Clarification’, and ‘Frauds in UCBs: Changes in Monitoring and Reporting mechanism’. This penalty has been imposed in exercise of powers vested in the RBI under the provisions of Section 47 A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949.

The Reserve Bank of India (RBI) has imposed, by an order dated September 01, 2023, a monetary penalty of ₹2.00 Lakh (Rupees Two Lakh only) on The Gandevi People’s Co-operative Bank Ltd., Navsari, Gujarat (the bank) for non-compliance with the directions issued by RBI on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’ and ‘Frauds in UCBs: Changes in Monitoring and Reporting mechanism’. This penalty has been imposed in exercise of powers vested in the RBI under the provisions of Section 47 A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949.

The Reserve Bank of India (RBI) has imposed, by an order dated September 01, 2023, a monetary penalty of ₹1.00 Lakh (Rupees One Lakh only) on Maninagar Co-operative Bank Ltd., Ahmedabad, Gujarat (the bank) for non-compliance with the directions issued by RBI on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’ and ‘Co-operative Banks - Interest Rate on Deposits’. This penalty has been imposed in exercise of powers vested in the RBI under the provisions of Section 47 A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949.

This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

Background

The statutory inspection of the bank conducted by RBI with reference to its financial position as on March 31, 2022, and examination of the Inspection Report, Risk Assessment Report and all correspondence related thereto revealed, inter alia, that the bank had (i) breached prudential inter-bank counterparty exposure limit, and (ii) not paid interest on overdue term deposits from the date of maturity till the date of repayment at the rate applicable to savings deposits or at the contracted rate of interest, whichever is lower. In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for failure to comply with the directions, as stated therein.

After considering the bank’s reply to the notice and oral submissions made by it during the personal hearing, RBI came to the conclusion that the aforesaid charge of non-compliance with the RBI directions was substantiated and warranted imposition of monetary penalty.

(Yogesh Dayal)      
Chief General Manager

Press Release: 2023-2024/1031

The Reserve Bank of India (RBI) has imposed, by an order dated August 31, 2023, a monetary penalty of ₹6.00 Lakh (Rupees Six Lakh only) on The Sarvodaya Sahakari Bank Limited, Modasa, Gujarat (the bank) for non-compliance with the directions issued by RBI on ‘Loans and advances to directors, relatives and firms /concerns in which they are interested’ read with ‘Loans and advances to directors etc - directors as surety/guarantors - Clarification’, ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’ and ‘Interest Rate on Deposits - Directions 2016’. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949.

The Reserve Bank of India (RBI) has imposed, by an order dated August 31, 2023, a monetary penalty of ₹3.50 Lakh (Rupees Three Lakh Fifty Thousand only) on The Janata Co-operative Bank Ltd., Godhra, Dist. Panchmahal, Gujarat (the bank) for non-compliance with the directions issued by RBI on ‘Donations to Trusts and Institutions where Directors, their relatives hold position or are interested’ and ‘Loans and advances to directors, relatives and firms /concerns in which they are interested’ read with ‘Loans and advances to directors etc- directors as surety/guarantors- Clarification’. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949.

The Reserve Bank of India (RBI) has imposed, by an order dated August 31, 2023, a monetary penalty of ₹6.50 lakh (Rupees Six Lakh Fifty Thousand only) on Dhanera Mercantile Co-operative Bank Ltd., Dhanera, Gujarat (the bank) for non-compliance with the directions issued by RBI on ‘Loans and advances to directors, relatives and firms/concerns in which they are interested’; ‘Loans and advances to directors etc. – directors as surety / guarantors – clarification’ and on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949.

The Reserve Bank of India (RBI) has imposed, by an order dated August 30, 2023, a monetary penalty of ₹6.00 lakh (Rupees Six Lakh only) on The Citizens’ Co-operative Bank Ltd., Jammu (the bank) for non-compliance with the specific directions issued by RBI under ‘Supervisory Action Framework (SAF)’ and directions issued under ‘Exposure norms and Statutory/ Other Restrictions - UCBs’. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949.