Press Releases

The Reserve Bank of India (RBI), vide order dated September 21, 2023, has cancelled the licence of National Urban Co-operative Bank Limited, Bahraich (U.P). Consequently, the bank ceases to carry on banking business, with effect from the close of business on September 22, 2023. The Commissioner and Registrar of Cooperative, Uttar Pradesh has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank.

RBI cancelled the licence of the bank as:

1. The bank does not have adequate capital and earning prospects. As such, it does not comply with the provisions of Section 11(1) and Section 22 (3) (d) read with Section 56 of the Banking Regulation Act, 1949.

2. The bank has failed to comply with the requirements of Sections 22(3) (a), 22 (3) (b), 22(3)(c), 22(3) (d) and 22(3)(e) read with Section 56 of the Banking Regulation Act, 1949;

3. The continuance of the bank is prejudicial to the interests of its depositors;

4. The bank with its present financial position would be unable to pay its present depositors in full; and,

5. Public interest would be adversely affected if the bank is allowed to carry on its banking business any further.

2. Consequent to the cancellation of its licence, National Urban Co-operative Bank Limited, Bahraich (U.P) is prohibited from conducting the business of ‘banking’ which includes, among other things, acceptance of deposits and repayment of deposits as defined in Section 5(b) read with Section 56 of the Banking Regulation Act, 1949 with immediate effect.

3. On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of ₹5,00,000/- (Rupees five lakh only) from Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to the provisions of DICGC Act, 1961. As per the data submitted by the bank, 99.87% of the depositors are entitled to receive full amount of their deposits from DICGC.

(Shweta Sharma)     
Deputy General Manager

Press Release: 2023-2024/973

The Reserve Bank of India had issued a Discussion Paper (DP) on January 14, 2022 proposing revisions to the current norms for the classification, valuation, and operation of investment portfolios of commercial banks. After considering the feedback received on the DP, the Reserve Bank of India (Classification, Valuation and Operation of Investment Portfolio of Commercial Banks) Directions, 2023 has been issued today.

2. The revised Directions include principle-based classification of investment portfolio, tightening of regulations around transfers to/from held to maturity (HTM) category and sales out of HTM, inclusion of non-SLR securities in HTM subject to fulfilment of certain conditions and symmetric recognition of gains and losses.

3. These Directions are expected to enhance the quality of banks' financial reporting, improve disclosures (disclosures of fair value of investments in HTM category, fair value hierarchy, sales out of HTM, etc.), provide a fillip to the corporate bond market, facilitate the use of derivatives for hedging, and strengthen the overall risk management framework of banks. While the revised Directions align the accounting norms for banks' investment portfolios with global financial reporting standards, important prudential safeguards such as investment fluctuation reserve (IFR), due diligence/limits with respect to non-SLR investments, internal control systems, reviews and reporting etc. have been retained and prudential concerns on reliability of valuation have been addressed.

4. The revised Directions shall apply to all commercial banks (excluding Regional Rural Banks) from the financial year commencing on April 1, 2024.

The Reserve Bank of India (RBI) has imposed, by an order dated August 14, 2023, a monetary penalty of ₹1.00 lakh (Rupees One Lakh only) on The National Co-operative Bank Ltd., Mumbai, Maharashtra (the bank) for non-compliance with the directions issued by RBI on ‘Maintenance of Deposit Accounts-Primary (Urban) Co-operative Banks’. 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 14, 2023, a monetary penalty of ₹1.00 lakh (Rupees One Lakh only) on The National Co-operative Bank Ltd., Mumbai, Maharashtra (the bank) for non-compliance with the directions issued by RBI on ‘Maintenance of Deposit Accounts-Primary (Urban) Co-operative Banks’. 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 14, 2023, a monetary penalty of ₹1.00 lakh (Rupees One Lakh only) on The National Co-operative Bank Ltd., Mumbai, Maharashtra (the bank) for non-compliance with the directions issued by RBI on ‘Maintenance of Deposit Accounts-Primary (Urban) Co-operative Banks’. 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 ₹11.00 lakh (Rupees Eleven Lakh only) on HCBL Co-operative Bank Ltd., Lucknow, Uttar Pradesh (the bank) for non-compliance with the directions issued by RBI on ‘Loans and Advances to Directors, their Relatives, and Firms / Concerns in which they are Interested’ and specific directions issued by RBI under the Supervisory Action Framework (SAF). 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 RBI with reference to its financial position as on March 31, 2021, and examination of the Inspection Report, Risk Assessment Report revealed, inter-alia, that the bank had (i) granted loans/advances to its director and their relatives and (ii) sanctioned fresh loans and advances to single borrowers in excess of 50% of applicable regularity limits and offered interest rates on deposits more than those offered by State Bank of India in violation of specific directions issued under SAF. 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 non-compliance 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.

(Shweta Sharma)     
Deputy General Manager

Press Release: 2023-2024/955

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.

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, 2021 and March 31, 2022, and examination of the Inspection Reports, Risk Assessment Reports revealed, inter alia, that the bank had (i) sanctioned fresh loans and advances and allowed cash credit facilities to be overdrawn in violation of specific directions issued under SAF, and (ii) breached prudential inter-bank (gross) exposure limit and inter-bank counterparty limit. 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 non-compliance with the directions, as stated therein.

After considering the bank’s reply to the notice, RBI came to the conclusion that the aforesaid charge of non-compliance with the RBI directions was substantiated and warranted imposition of monetary penalty.

(Shweta Sharma)      
Deputy General Manager

Press Release: 2023-2024/954

SCHEDULED COMMERCIAL BANKS (Including RRBs,SFBs and PBs) ALL SCHEDULED BANKS  09-Sep-2225-AUG-2023*08-SEP-2023*09-Sep-2225-AUG-2023*08-SEP-2023*  ILIABILITIES TO THE BKG.SYSTEM (A)  a) Demand & Time deposits from bks.183335.64246284.1253485.01186364.23248463.22255863.66** b) Borrowings from banks41752.75199018.31188137.5441824.75199142.43188207.97  c) Other demand & time liabilities44678.468276.3270299.5245184.8168988.2871006.97

The result of the auction of State Government Securities held on September 21, 2023 is as under:  (Amount in ₹ Crore)   ANDHRA PRADESH 2036BIHAR 2031CHHATTISGARH 2030GOA 2033  Notified Amount100020001000100  Tenure138710 Competitive Bids Received (i) No.4724215 (ii) Amount572532902600325 Cut-off Yield (%)7.447.497.477.46 Competitive Bids Accepted (i) No.31572 (ii) Amount964.3571940.870939.98296.547 Partial Allotment Percentage of 

The Reserve Bank had introduced a scheme for handling wilful defaulters, effective from April 1, 1999. These guidelines were subsequently consolidated into the Master Circular on Wilful Defaulters, last updated on July 1, 2015.  2.The instructions on wilful defaulters have been revised after a review of the extant instructions and consideration of various judgments/ orders from the Hon’ble Supreme Court and Hon’ble High Courts, as well as representations