RBI has imposed penalty on 5 banks. They are accused of not complying with banking rules. Let us know which banks are included in this list and will this action affect the customers?
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RBI Action: The Reserve Bank of India (RBI) has once again taken strict action on violation of rules. Monetary penalty has been imposed on five banks. During the inspection conducted in relation to the financial condition, deficiencies in compliance with the guidelines were revealed. After which RBI issued show cause notices to all the banks before taking action. The decision to impose penalty was taken on the basis of the presentations given during the investigation.
This list includes The Anand Mercantile Co-operative Bank Limited (Gujarat), The Bellary Co-operative Central Bank Limited (Karnataka), The Dharmapuri District Central Co-operative Bank Limited (Tamil Nadu), The Kalaburagi and Yadgir District Co-operative Central Bank Limited (Karnataka) and The Bharat Co-operative Bank Limited (Bengaluru, Karnataka).
How much fine was imposed on Karnataka banks?
- The Bellary Co-operative Central Bank Limited sanctioned a loan to one of its directors. Apart from this, it also held shares in other co-operative societies in violation of the BR Act. Therefore, a fine of Rs 1.50 lakh has been imposed on the bank.
- The Kalaburagi and Yadgir District Co-operative Central Bank Limited did not upload the KYC records of customers to the central KYC record registry within the stipulated time limit. A penalty of Rs 50,000 has been imposed on it.
- The Bharat Co-operative Central Bank Limited is accused of not following the instructions issued under SAF. A fine of Rs 50,000 has been imposed on it. The bank sanctioned and renewed loans to areas with high levels of NPA or default. Approved and disbursed loans and advances not backed by collateral security. Apart from this, deposits were offered at interest rates higher than the rates offered by SBI.
The Anand Mercantile Co-operative Bank Ltd
The bank has been fined Rs 2 lakh for non-compliance with KYC norms. The bank outsourced its core management function of internal audit. It also failed to conduct periodic review of risk classification of certain accounts with a minimum periodicity of once in 6 months.
The Dharampuri District Central Co-operative Bank Ltd.
This bank located in Tamil Nadu has been fined Rs 1 lakh. This bank also sanctioned loans related to directors. Violations of guidelines were detected during the inspection conducted by NABARD.
RBI has clarified that the action will not affect any agreement or transaction between customers and banks. If you also have an account in any of these banks, then there is nothing to worry about. Apart from this, it will not have any adverse effect on any other action taken in future.
