Mumbai: The Reserve Bank of India (RBI) has taken strict action against five co-operative banks for various regulatory violations. The apex bank imposed fines on four banks. It also revoked the license of Urban Cooperative Bank Limited in Sitapur, Uttar Pradesh for not abiding by its rules.
The RBI informed that Urban Cooperative Bank Limited in Sitapur has insufficient funds for operations, and there is no prospect of future earnings. Therefore, the bank is being shut down.
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The RBI has also directed the Commissioner and Registrar of Uttar Pradesh to take appropriate measures to close the bank. In addition, RBI states that the bank has not made full payments to its customers. The apex bank assures that 98.32 per cent of customers will receive their full money back, and deposits up to Rs 5 lakh are insured. According to RBI data, 98.32 per cent of the bank’s customers have deposits of Rs 5 lakh or less, thus, reaffirming that they will surely receive their funds.
The RBI has imposed fines on four cooperative banks. These include Prathamik Shikshak Sahakari Bank Ltd., Patan Co-operative Bank Ltd., Rajarshi Shahu Sahakari Bank Ltd., and The District Co-operative Central Bank Ltd. The penalties have been imposed by the severity of the malpractices followed in these banks.
Rajarshi Shahu Sahakari Bank Ltd., Pune, Maharashtra, was fined Rs 1 lakh by the Reserve Bank for failing to follow their guidelines on ‘Maintenance of Deposit Accounts – Primary (Urban) Co-operative Banks.’ The Prathamik Shikshak Sahakari Bank Limited, Satara, Maharashtra, was fined Rs 1 lakh for failing to follow the RBI’s guidelines on the ‘Management of Advances-UCBs.’
Patan Co-operative Bank Limited, Mumbai, Maharashtra, was fined Rs 1 lakh by the Reserve Bank of India for failing to follow the RBI’s ‘Reserve Bank of India – Know Your Customer (KYC) Direction, 2016.’ The District Co-operative Central Bank Ltd., Mahabubnagar, Telangana, was fined Rs 10,000 by the RBI for failing to follow the guidelines provided by the National Bank for Agricultural and Rural Development (NABARD) regarding the ‘Review of Frauds – Guidelines on Monitoring and Reporting System’ and the ‘Frauds – Guidelines for Classification, Reporting and Monitoring of Frauds.’
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