The Reserve Bank has slapped fines on five co-operative banks for not following the rules. These banks are Uma Co-operative Bank Ltd, Pij People’s Co-operative Bank Ltd, Mizoram Co-operative Apex Bank Ltd, Birbhum District Central Co-operative Bank Ltd, and Shihori Nagarik Sahakari Bank Ltd.
Uma Co-operative Bank Ltd. in Vadodara, Gujarat was fined ₹7.00 lakh for not sticking to RBI‘s rules on deposit placement with other banks. They exceeded the limits for how much they could put with other banks.
Pij People’s Co-operative Bank Limited in Pij, Dist. Kheda, Gujarat got a ₹2.00 lakh fine for not following RBI’s rules on ‘Know Your Customer’ directions. They didn’t review risk categorization of accounts as they should have.
Mizoram Co-operative Apex Bank Ltd. in Aizawl was fined ₹2.00 lakh for not following RBI’s rules about housing finance. They lent more for housing than they were supposed to.
Birbhum District Central Co-operative Bank Ltd. in Birbhum, West Bengal got a ₹1.10 lakh fine for not following RBI’s ‘Know Your Customer’ directions and not becoming a member of certain credit information companies. They didn’t review risk categorization of accounts and missed categorizing some accounts. They also didn’t join three out of four credit information companies.
Shihori Nagarik Sahakari Bank Ltd. in Shihori, Dist. Banaskantha, Gujarat received a ₹1.00 lakh fine for not following RBI’s rules on loans to directors and for breaching the limits on placing deposits with other banks. They gave loans with directors’ relatives as guarantors and exceeded the inter-bank exposure limit.
These actions were taken by the Reserve Bank because these banks didn’t follow the rules, but it doesn’t mean their transactions with customers were invalid.
