The Reserve Bank of India (RBI) has imposed monetary penalties on the following co-operative banks for contravention of/non-compliance with the directions issued by RBI on “Exposure Norms and Statutory/Other Restrictions-UCBs”.

The penalties have been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into account the failure of the banks to adhere to the aforesaid directions issued by RBI.

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 banks with their customers.

Background

The inspection of the banks conducted by RBI with reference to their financial position as on March 31, 2018 (The Berhampur Co-operative Urban Bank Ltd.) and March 31, 2019 (The Boral Union Co-operative Bank Ltd. and Khatra People’s Co-operative Bank Ltd.) revealed, inter alia, contravention of/ non-compliance with the directions issued by Reserve Bank of India (RBI) on “Exposure Norms and Statutory/Other Restrictions-UCBs”.

Based on the same, notices were issued to the banks advising them to show cause as to why penalty should not be imposed for contravention of / non-compliance with the directions. The banks’ replies and additional submissions and, where personal hearing was availed of by the bank, the submissions made therein were considered, and RBI came to the conclusion that the aforesaid charges of contravention of / non-compliance with RBI directions were substantiated and warranted imposition of monetary penalty.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2020-2021/725