The Reserve Bank of India (RBI) on June 3 imposed a fine on two cooperative banks citing violation of rules.
The Reserve Bank of India (RBI) on June 3 imposed a fine on two cooperative banks citing violation of rules. These banks are Bavla Nagarik Sahakari Bank in Gujarat and Ron Taluka Primary Teachers Cooperative Bank Limited in Karnataka. RBI imposed a fine of Rs 75,000 on Ron Taluka Bank citing non-compliance of certain instructions issued by RBI on Fraud Monitoring and Reporting Mechanism and Policy and Practice regarding Nominal Membership.
Why was the fine imposed?
A Statutory Inspection of the bank was conducted by the RBI regarding the financial position of the bank as on March 31, 2022. A notice was issued to the bank for non-compliance of RBI instructions. RBI said that after considering the bank’s reply to the notice and the oral submissions made by it during the personal hearing, RBI found that the allegations against the bank were correct, for which it was appropriate to impose a penalty.
Bavla Nagarik Bank fined Rs 3 lakh
RBI imposed a penalty of Rs 3 lakh on Bavla Nagarik Bank for non-compliance of the directions issued by RBI regarding ‘loans and advances to directors, relatives and companies/entities in which they are interested’ and ‘loans and advances to directors etc.’ Bavla Nagarik Bank was examined by RBI with reference to its financial position as on March 31, 2023. The bank was issued a notice for non-compliance with RBI’s instructions.
After considering the bank’s reply to the notice and the oral submissions made by it during the personal hearing, RBI found that the allegations against the bank were correct, for which it was appropriate to impose a penalty.
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