RBI fines two cooperative banks in Maharashtra

The Reserve Bank of India (RBI) has imposed monetary penalty on two cooperative banks in Maharashtra -- Nanded-based Shankar Nagari Sahakari Bank Limited and Latur-based Siddheshwar Sahakari Bank. Former will have to shell out Rs 1 lakh, and the latter will have to pay Rs 3.50 lakh for non-compliance with directions issued by the RBI to Urban Co-operative Banks on exposure norms and statutory/ other restrictions.

This penalty has been imposed by RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.

It was found that both cooperative banks did not comply with directions issued by the RBI on exposure norms. Based on the same, a notice was issued to both banks separately advising it to show cause as to why the penalty should not be imposed for non-compliance with the directions.

RBI stated, “After considering the bank's replies and oral submissions made during the personal hearing, RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty.”