RBI imposes monetary penalty on three co-operative banks in Gujarat

The central bank said that this penalty has been imposed in the exercise of powers conferred on RBI under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.

"This action is based on a deficiency in regulatory compliance and is not intended topronounce upon the validity of any transaction or agreement entered into by the bankwith its customers," RBI said.

The central bank said that as per the statutory inspection conducted by them with reference to its financial position as of March 31, 2022, and examination of the Inspection Report, Risk Assessment Report and all correspondence revealed, inter that the bank had breached the prudential inter-bank counterparty exposure limit.

"Consequently, a notice was issued to the bank advising it to show cause as to whypenalty should not be imposed on it for failure to comply with the said directions, asstated therein," RBI said.

Taking similar action on United Co-operative Bank which is based in Ahmedabad, RBI imposed a monetary penalty of Rs 1 lakh for non-compliance with the directions issued by it on 'Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)'.

The central bank said that the statutory inspection of the bank conducted by RBI with reference to its financial position as of March 31, 2022, and examination of the Inspection Report,Risk Assessment Report and all correspondence related revealed that the bank had breached the prudential inter-bank gross exposure limit as well as the prudential inter-bank counterparty exposure limit.

Earlier today, the Reserve Bank of India (RBI) also said that it has imposed a monetary penalty of Rs 2 lakh on Gujarat-based Sardargunj Mercantile Co-operative Bank Limited in Patan, for non-compliance with the directions issued by the central bank on 'Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)'. (ANI)