Latest News | RBI Imposes Penalty on 2 Co-operative Banks

Mumbai, Nov 4 (PTI) The RBI on Wednesday said it has imposed penalty totalling Rs 15 lakh on two co-operative banks, including Millath Co-operative Bank, Davangere (Karnataka) for non-compliance with directions issued by it.

A penalty of Rs 10 lakh has been imposed on Millath Co-operative Bank for "non-adherence/violation of all inclusive directions and other directions imposed on the bank", the Reserve Bank of India (RBI) said in a statement.

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In another statement, it said a monetary penalty of Rs 5 lakh has been imposed on The Thiruvaikuntam Co-operative Urban Bank Limited, Thoothukudi (Tamil Nadu) for contravention of the directions issued by RBI on prohibition of loans and advances to directors.

In both cases, the penalty has been imposed 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, it said.

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RBI said the inspection report of Millath Co-operative Bank, based on its financial position as on March 31, 2019, revealed inter alia, violation/non-compliance with the directions on permitting of withdrawals in excess of the stipulated amount and sanctioning of fresh loans and advances in violation of directions issued under Supervisory Action Framework (SAF).

Meanwhile, the inspection report of The Thiruvaikuntam Co-Operative Urban Bank, based on its financial position as on March 31, 2019, revealed that the bank had sanctioned loans to its directors in contravention with the directions issued by RBI in this regard.

Notices were issued to both the banks. After considering their replies and oral submissions made during the personal hearing, RBI came to the conclusion that the charges of non-compliance with directions were substantiated and warranted imposition of monetary penalty.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)