The Reserve Bank of India (RBI) has imposed penalties on five Gujarat co-operative banks for a series of regulatory compliance deficiencies. The announcement was made on Thursday.
Among the banks penalized are Surat National Co-operative Bank, People's Co-operative Bank in Dholka, Vadnagar Nagarik Sahakari Bank, Mahila Co-operative Nagrik Bank in Bharuch, and Chhapi Nagarik Sahakari Bank. The offenses ranged from issuing prohibited loans to directors to issues with 'Customer Protection', 'Know Your Customer (KYC)', 'Placement of Deposits with Other Banks', 'Unauthorized Electronic Banking Transactions', and 'Interest Rate on Deposits'.
Surat National Co-operative Bank faced the heaviest penalty, with a fine of Rs 6.00 lakh ($8,000 approx) for contravening deposit interest rates and customer protection rules. People's Co-operative Bank was fined Rs 3.00 lakh ($4,000 approx) for non-compliance with loan directives to directors and deposit interest rates.
Vadnagar Nagarik Sahakari Bank and Mahila Co-operative Nagrik Bank in Bharuch were each penalized Rs 2.00 lakh ($2,700 approx). The former was fined for similar contraventions as People's Co-operative Bank, while the latter was penalized for non-adherence to directives on deposit placement and KYC norms.
Chhapi Nagarik Sahakari Bank received the smallest penalty of Rs 1.00 lakh ($1,300 approx) for non-compliance with loan directives to directors.
The RBI clarified that these penalties are due to 'Regulatory Compliance Deficiencies' and do not affect the 'Validity of Bank Transactions' or 'Agreements'. This enforcement action comes as part of RBI's continued efforts to ensure that banks adhere strictly to regulatory norms and maintain the highest standards of conduct in their operations.
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