RBI has shown strictness on two banks. Penalty has been imposed for not complying with banking rules properly. The central bank has also issued a statement. Let us know what is the reason behind this and will it affect the customers as well?
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RBI Action: Whenever a bank fails to comply with the rules properly, the Reserve Bank of India (RBI) takes strict action. Once again RBI’s action has come to the fore. Monetary fines have been imposed on two cooperative banks. This information was given by the central bank on Thursday, September 11. Will the action affect the customers or not? RBI has also issued a clarification regarding this.
A fine of Rs 3 lakh has been imposed on Progressive Mercantile Co-operative Bank Limited Ahmedabad, Gujarat. It is accused of violating many banking rules including KYC, customer protection. A fine of Rs 50 thousand has been imposed on Sikkim State Co-operative Bank Limited.
Violation of guidelines by both the banks was detected during an inspection. After which a show cause notice was issued. The decision to impose a fine was taken on the basis of the reply received to the notice and the submissions made during the oral hearing.
Progressive Mercantile Co-operative Bank violated these rules
This Gujarat bank conducted concurrent audit on quarterly basis instead of checking transactions simultaneously and submitted the report late. Apart from this, it was also not able to conduct periodic review of risk classification of some accounts, which was at least once in 6 months. It was also not able to provide its customers with a prompt process to “Reply” on SMS alerts to inform them about objections related to unauthorized electronic banking transactions.
Sikkim’s cooperative bank violated these rules
Sikkim State Co-operative Bank Limited failed to upload the KYC records of customers to the Central KYC Record Registry within the stipulated time limit. Penalty has been imposed only after the allegations were confirmed. RBI has also made it clear that the action taken against both the banks is completely based on regulatory deficiencies. It will not have any impact on any future action. Nor is it intended to affect the validity of the transactions or agreements between customers and banks.
