The Reserve Bank of India (RBI) has taken strict action against four co-operative banks in Gujarat, imposing monetary penalties due to deficiencies in regulatory compliance. These financial institutions include The Sarvodaya Sahakari Bank Ltd, Dhanera Mercantile Co-operative Bank Ltd, The Janata Co-operative Bank Ltd, and Maninagar Co-operative Bank Ltd.
Penalty on The Sarvodaya Sahakari Bank Limited, Modasa, Gujarat (₹6.00 Lakh)
The RBI has penalized The Sarvodaya Sahakari Bank Limited with a ₹6.00 lakh fine for failing to comply with the RBI’s directives on various aspects, including loans and advances to directors, relatives, and firms, as well as the placement of deposits with other banks by primary (urban) co-operative banks. The bank’s violations include:
- Sanctioning credit facilities to a relative of one of its directors and having relatives of directors stand as guarantors.
- Breaching the inter-bank gross exposure limit.
- Breaching the inter-bank counterparty exposure limit.
- Not paying interest on matured fixed deposits as per the applicable rate.
Penalty on Dhanera Mercantile Co-operative Bank Ltd., Dhanera, Gujarat (₹6.50 Lakh)
Dhanera Mercantile Co-operative Bank Ltd. has incurred a monetary penalty of ₹6.50 lakh for non-compliance with RBI directives concerning loans and advances to directors, relatives, firms, and the placement of deposits with other banks by primary (urban) co-operative banks. The bank’s violations include:
- Sanctioning credit facilities to its directors and their relatives, with relatives acting as guarantors.
- Breaching prudential inter-bank (gross) exposure limits.
- Breaching prudential inter-bank counterparty exposure limits.
Penalty on The Janata Co-operative Bank Ltd., Godhra, Gujarat (₹3.50 Lakh)
The Janata Co-operative Bank Ltd. faces a monetary penalty of ₹3.50 lakh for non-compliance with RBI directives related to donations to trusts and institutions where directors or their relatives hold positions of interest. Additionally, they violated directives regarding loans and advances to directors, relatives, and firms. The bank’s violations include:
- Making donations to a trust where one of the bank’s directors was a trustee.
- Sanctioning loans with relatives of the bank’s directors as guarantors.
Penalty on Maninagar Co-operative Bank Ltd., Ahmedabad, Gujarat (₹1.00 Lakh)
Maninagar Co-operative Bank Ltd. has been fined ₹1.00 lakh for failing to comply with RBI directives regarding the placement of deposits with other banks by primary (urban) co-operative banks and interest rates on deposits. The bank’s violations include:
- Breaching prudential inter-bank counterparty exposure limits.
- Not paying interest on overdue term deposits as per the applicable rates.
It’s important to note that the actions taken by the Reserve Bank of India are solely based on deficiencies in regulatory compliance and do not pass judgment on the validity of any transactions or agreements entered into by these banks with their customers. These penalties aim to ensure that co-operative banks adhere to the established banking regulations and guidelines set by the RBI, promoting a stable and secure banking environment.