Reserve Bank Penalizes Five Gujarat Cooperative Banks for Regulatory Lapses

In a recent move, the Reserve Bank of India (RBI) has taken strict action against five cooperative banks in Gujarat for various regulatory lapses. The penalties, ranging from Rs 50,000 to Rs 5 lakh, were imposed over the past month, targeting non-compliance issues.

On December 13, 2023, Shree Bharat Co-operative Bank in Vadodara faced the highest penalty of Rs 5 lakh for not adhering to the RBI’s directives on deposit placement and violating norms on interest rates for deposits as per the 2016 guidelines.

Sankheda Nagarik Sahakari Bank, based in Chhotaudepur district, received a Rs 5 lakh penalty on December 7, 2023, for non-compliance with guidelines on loans and advances to directors, relatives, and associated firms. The bank also violated norms related to deposits with other banks by primary cooperative banks.

On December 8, 2023, Bhuj Commercial Co-operative Bank, located in Kachchh district, faced a penalty of Rs 1.50 lakh for failure to comply with Know Your Customer (KYC) directives and for not meeting the prescribed interest rates on deposits.

Limdi Urban Cooperative Bank, based in Dahod district, was penalized with Rs 50,000 on December 13, 2023, for non-compliance with deposit rate regulations.

Furthermore, Co-operative Urban Bank in Parlakhemundi faced a penalty of Rs 1.50 lakh on December 7, 2023, for not adhering to directives on membership with credit information companies, exposure norms, and statutory restrictions on Urban Cooperative Banks (UCBs).

The RBI clarified that the monetary penalties are solely based on deficiencies in regulatory compliance and do not question the validity of any transactions or agreements with customers made by the banks.