Five cooperative banks now face financial penalties from the Reserve Bank of India (RBI) for breaking regulations, the banking watchdog announced on March 27.
According to the announcement, these banks are the Good Co-operative Bank, the Standard Urban Co-operative Bank, the Howrah District Central Co-operative Bank, the Mandi Urban Co-operative Bank, and the Rajapalayam Co-operative Urban Bank.
The Mandi Urban Co-operative Bank was fined Rs 6 lakh by the central bank, Rajapalayam Co-operative Urban Bank was fined Rs 75,000, Howrah District Central Co-operative Bank and Excellent Co-operative Bank were fined Rs 1 lakh apiece, and Standard Urban Co-operative Bank was fined Rs 50,000.
The Mandi Urban Co-operative Bank was fined by the RBI for violating specific guidelines regarding the “placing of deposits with other banks by primary (Urban) co-operative banks (UCBs)”, as stated in a press release from the RBI.
Additionally, the Reserve Bank of India determined that the Excellent Co-operative Bank case warranted the imposition of a monetary penalty due to the fact that the charge of failing to transmit the required amount to the Depositor Education and Awareness Fund was genuine.
The Howrah District Central Co-operative Bank was penalized because it had neglected to update client account KYC on a regular basis and to implement a system for classifying accounts based on risk.
| Cooperative Bank Name | Monetary Penalty |
|---|---|
| Mandi Urban Cooperative Bank | $600,000 |
| Excellent Cooperative Bank | $100,000 |
| Howrah District Central Cooperative Bank | $100,000 |
| Rajapalayam Cooperative Urban Bank | $75,000 |
| Standard Urban Cooperative Bank | $50,000 |
| TOTAL | $925,000 |
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