The Reserve Bank of India (RBI) announced on April 4 that it has imposed monetary penalties on five co-operative banks for breaching regulatory rules.
These banks include Bassein Catholic Co-operative Bank, Tirumangalam Co-operative Urban Bank, The Tirupattur Urban Co-operative Bank, Nagpur Nagarik Sahakari Bank, and The Himachal Pradesh State Co-operative Bank, as stated in the release.
According to the RBI, penalties of Rs 61.60 lakh were imposed on Bassein Catholic Co-operative Bank, Rs 28.30 lakh on Nagpur Nagarik Sahakari Bank, Rs 5 lakh on The Himachal Pradesh State Co-operative Bank, and Rs 25,000 each on Tirumangalam Co-operative Urban Bank and The Tirupattur Urban Co-operative Bank.
The penalties on Bassein Catholic Co-operative Bank were attributed to delayed reporting of frauds, failure to conduct periodic risk categorization reviews of accounts during FY 2021-22, imposing penal charges for non-maintenance of minimum balances in dormant/inoperative accounts, and restructuring credit facilities without ensuring the borrowers’ financial viability and repayment certainty.
Similarly, Nagpur Nagarik Sahakari Bank was penalized for not paying interest on certain term deposits for Sundays/holidays/non-business working days, delaying repayment of balances in certain current accounts of deceased depositors, and applying a savings deposit interest rate to unclaimed matured term deposits.
Additionally, the bank failed to undertake periodic risk categorization reviews of customer accounts at least once every six months, as per the RBI release.
