The Reserve Bank of India (RBI) took significant actions on Thursday, January 18, 2024, by imposing hefty fines on five cooperative banks due to violations of banking regulations. The penalties were enforced on NKGSB Cooperative Bank, New India Cooperative Bank, Mehsana Nagrik Cooperative Bank, and The Patdi Nagrik Sahakari Bank Limited for various lapses in adhering to regulatory guidelines.
NKGSB Cooperative Bank Faces 5 Million Rupees Penalty
The RBI has levied a substantial penalty of 5 million rupees on NKGSB Cooperative Bank. The regulatory body cited failures in adhering to RBI’s regulations during the opening of current accounts and granting transaction permissions without proper procedures. Despite an unsatisfactory response to the notice issued by RBI, the bank now faces a significant monetary penalty.
Penalties on Other Banks for Regulatory Non-Compliance
- New India Cooperative Bank – 1.5 Million Rupees Fine: RBI imposed a penalty of 1.5 million rupees on New India Cooperative Bank in Mumbai for non-compliance with regulations while handling funds. The investigation revealed discrepancies in complying with RBI’s regulations during donations from profits in the financial year 2020-21.
- Mehsana Nagrik Cooperative Bank – 700,000 Rupees Penalty: Mehsana Nagrik Cooperative Bank in Gujarat faces a penalty of 700,000 rupees for violations related to loan and advance disbursements. RBI took action due to the bank’s failure to adhere properly to regulatory guidelines in these areas.
Impact on Customers
The imposed monetary penalties are expected to have no direct impact on the customers of these five banks. The fines are related to operational activities, and regular banking services to customers are anticipated to continue without interruption.
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