Mumbai, Nov 28 (PTI) The Reserve Bank of India has imposed a penalty of Rs 1.25 crore on Zoroastrian Co-operative Bank, Mumbai for non-compliance with certain directions, including one related to discounting of bills.

In a release, the RBI said the bank had failed to comply with its directions on 'Discounting of Bills by UCBs – Restricted Letters of Credit (LC)' and the provisions of the Rules, as it discounted accommodation bills under LCs without establishing the genuineness of underlying transactions/ documents and failed to preserve records in good order for a period of eight years.

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In a separate release, the RBI said a penalty of Rs 20 lakh has been imposed on Indian Mercantile Co-operative Bank, Lucknow for non-compliance with the certain norms related classification of non-performing assets.

The central bank also imposed penalties on five other cooperative banks.

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The RBI, however, added that penalties are based on deficiency 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.

(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)